EXHIBIT 99.4
SUBSERVICING AGREEMENT
This SUBSERVICING AGREEMENT (this "Agreement") is entered into as of
November 23, 2004, by and between Citibank USA, National Association, a national
banking association (the "Subservicer") and The Student Loan Corporation, a
Delaware corporation (the "Servicer").
WITNESSETH:
WHEREAS, the Servicer provides servicing functions for SLC Student
Loan Trust 2004-1 (the "Issuer") that include servicing and holding student
loans which are guaranteed under a guarantee program established pursuant to the
requirements of the Higher Education Act of 1965, as amended (the "Student
Loans"); and
WHEREAS, such services are provided by the Servicer to the Issuer
pursuant to a Servicing Agreement, dated as of November 23, 2004 (the "Servicing
Agreement"), by and between (i) the Servicer, (ii) the Issuer, and (iii) The
Student Loan Corporation, not in its individual capacity but solely in its
capacity as administrator (in such capacity, the "Administrator") under the
Administration Agreement, dated as of November 23, 2004 (the "Administration
Agreement"), by and between the Issuer and The Student Loan Corporation, and as
servicer (in such capacity, the "Servicer"); and
WHEREAS, the Issuer will issue notes (the "Notes") pursuant to the
Indenture, dated as of November 23, 2004 (the "Indenture"), by and among the
Issuer, Wachovia Bank, National Association, as indenture trustee (the
"Indenture Trustee"), and Citibank, N.A., as indenture administrator (the
"Indenture Administrator") and as eligible lender trustee, which Notes are
payable from the assets of the Issuer; and
WHEREAS, the Subservicer is engaged in the business of providing,
among other things, loan servicing services for Student Loans; and
WHEREAS, the Servicer wishes to retain the Subservicer to service
all the Student Loans owned by the Issuer as beneficial owner which are required
to be serviced by the Servicer under the Servicing Agreement (the "Subserviced
Student Loans"), and the Subservicer wishes to undertake the obligation to
service all such Subserviced Student Loans in accordance with the requirements
of the Higher Education Act of 1965, as amended, regulations promulgated
thereunder by the U.S. Department of Education and requirements issued by any
applicable guarantor (collectively, the "Higher Education Act") and under the
terms hereinafter set forth.
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein, the Servicer and the Subservicer agree as follows:
1. Definitions. Capitalized terms which are not otherwise defined in
this Agreement shall have the meanings ascribed thereto in Appendix A to the
Indenture.
2. Servicing Requirement and Engagement of Subservicer. The Servicer
hereby authorizes and appoints the Subservicer to act as its agent for the
limited purpose of servicing the Subserviced Student Loans. The Subservicer
agrees to perform such functions in compliance with all requirements of the
Higher Education Act and all other applicable laws and regulations, and in
accordance with the terms and conditions of this Agreement.
The authorization granted by this Agreement includes, but is not
limited to, correspondence and communication with any Guaranty Agency or the
U.S. Department of Education regarding the Subserviced Student Loans, the
assignment of claims to any guarantor or insurer, communication with borrowers
under the Trust Student Loans (the "Borrowers") and any other communication,
correspondence, signature or other act required to service the Subserviced
Student Loans in accordance with requirements of the Higher Education Act or
regulations promulgated by any Guaranty Agency.
3. Subservicer Compensation. a. The Servicer shall pay compensation
to the Subservicer for its services hereunder as may be reasonably agreed to
from time to time between the Servicer and the Subservicer.
b. The Subservicer shall submit an invoice monthly to the Servicer,
and the Servicer shall remit payment for services performed as shown on that
invoice.
c. Payment is due within thirty (30) days after receipt of the
billing package. The billing package shall consist of an invoice and supporting
documentation.
d. The Subservicer acknowledges that the Issuer shall be entitled to
receive all payments of principal, interest and late charges received with
respect to the Subserviced Student Loans and that the Subservicer shall have no
right to retain such amounts as payment of any fees due the Subservicer from the
Servicer under the terms of this Agreement. The Servicer hereby authorizes the
Subservicer to assess, collect and retain any charges which the Servicer or the
Issuer is permitted by law or regulation to assess with respect to not
sufficient fund ("NSF") processing or other collection costs.
e. The Subservicer 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 Subservicer and expenses
incurred in connection with distributions and reports to the Servicer.
Notwithstanding anything to the contrary contained herein, the Subservicer 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 Subservicer may also, at
its option, collect fees from Borrowers for
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returned check processing or other insufficient fund transactions and may assess
such fees from the Borrower's Subserviced Student Loan payment and retain such
fees.
f. If costs beyond the control of the Subservicer shall increase,
including, without limitation, postal rates, or the imposition of any tax or
assessment not currently being charged against the fees of the Subservicer, then
the Subservicer shall provide the Servicer with ninety (90) days prior written
notice (and including supporting documentation) of such proposed increased costs
and expenses. If the Servicer accepts such increased costs and expenses, the
increased costs and expenses will go into effect at the end of such ninety (90)
day period. If the Servicer objects to such fee increase and the Subservicer
fails to agree to reduce or eliminate the increase in a manner satisfactory to
the Servicer, then the Servicer may cause an early termination to occur and the
Subserviced Student Loans will be deconverted at cost within one hundred and
eighty (180) days of receipt of said notice.
g. If the Subservicer's costs and expenses are increased due to
changes in the manner of servicing the Subserviced Student Loans as a result of
changes in the Higher Education Act or the interpretation thereof or due to
changes in Guaranty Agency requirements, then ninety (90) days after delivery of
written notice to the Servicer the Subservicer may increase servicing fees
payable hereunder to reasonably reflect such costs and expenses. However, no
such increase shall take effect until the Subservicer provides supporting
documentation to the Servicer that justifies such increase. In the event the
parties do not agree on the interpretation of the changes to the Higher
Education Act, then either party may terminate this Agreement upon ninety (90)
days written notice to the other party; provided, however, that the Subservicer
shall not terminate this Agreement unless and until the Servicer shall have
entered into another agreement similar to this with the Subservicer or another
Subservicer.
If the Servicer believes the cost for services under this Agreement
is lowered by changes in regulations, law or processing, the Servicer will
submit a proposed fee schedule to the Subservicer. If the Subservicer does not
reject the schedule, the fees will go into effect ninety (90) days thereafter.
In the event that the parties do not agree to the fee schedule, the Servicer may
terminate this Agreement upon ninety (90) days written notice to the
Subservicer.
4. Custody of Subserviced Student Loan Files. To assure uniform
quality in servicing the Subserviced Student Loans and to reduce administrative
costs, the Servicer hereby revocably appoints the Subservicer, and the
Subservicer hereby accepts such appointment, to act for the benefit of the
Servicer, the Issuer, the Indenture Administrator, and the Indenture Trustee as
custodian of the following documents or instruments (collectively the
"Subserviced Student Loan Files") which are hereby constructively delivered to
the Indenture Administrator, as pledgee of the Issuer with respect to each
Subserviced Student Loan:
a. the original fully executed copy of the note (or all electronic
records evidencing the same) evidencing the Subserviced Student Loan; and
b. any and all other documents and computerized records that the
Subservicer shall keep on file, in accordance with its customary procedures,
relating to such Subserviced Student Loan or any obligor with respect thereto.
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5. Duties of Subservicer as Custodian. The Subservicer shall hold
the Subserviced Student Loan Files for the benefit of the Servicer, the Issuer,
the Indenture Administrator and the Indenture Trustee and maintain such accurate
and complete accounts, records and computer systems pertaining to each
Subserviced Student Loan File as shall enable the Servicer to comply with the
Servicing Agreement. In performing its duties as custodian, the Subservicer
shall act with reasonable care and shall ensure that it fully complies with all
applicable Federal and state laws, including the Higher Education Act, with
respect thereto. The Subservicer shall take all actions necessary with respect
to the Subserviced Student Loan Files held by it under this Agreement and of the
related accounts, records and computer systems, in order to enable the Servicer
and the Issuer to verify the accuracy of the Subservicer's record keeping with
respect to the Subservicer's obligations as custodian hereunder. The Subservicer
shall promptly report to the Servicer, the Issuer, the Administrator, the
Indenture Administrator and the Indenture Trustee any material failure on its
part to hold the Subserviced 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 Owner Trustee, the
Indenture Administrator or the Indenture Trustee of the Subserviced Student Loan
Files. If in the reasonable judgment of the Servicer it is necessary to preserve
the interests of the Noteholders and the Trust in the Subserviced Student Loans
or at the request of the Owner Trustee or the Administrator, the Subservicer
shall transfer physical possession of the notes evidencing the Subserviced
Student Loans to the Servicer, the Owner Trustee, the Indenture Administrator
the Indenture Trustee or any other custodian for any of them designated by the
Owner Trustee.
The Subservicer shall maintain each Subserviced Student Loan File at
one of the offices specified in Attachment B to the Servicing Agreement or at
such other office as shall be consented to by the Servicer upon written notice
to the Servicer. Upon reasonable prior notice, the Subservicer shall make
available to the Servicer or its respective duly authorized representatives,
attorneys or auditors a list of locations of the Subserviced Student Loan Files
and the related accounts, records and computer systems maintained by the
Subservicer at such times during normal business hours as the Issuer shall
instruct.
Upon written instruction from the Servicer, the Subservicer shall
release any Subserviced Student Loan File to the Servicer, the Servicer's agent
or the Servicer's designee, as the case may be, at such place or places as the
Servicer may reasonably designate, as soon as practicable. The Servicer shall
cooperate with the Subservicer to provide the Subservicer with access to the
Subserviced Student Loan Files in order for the Subservicer to continue to
service the Subserviced Student Loans after the release of the Subserviced
Student Loan Files. In the event the Subservicer is not provided access to the
Subserviced Student Loan Files, the Subservicer shall not be deemed to have
breached its obligations pursuant to Section 6 if it is unable to perform such
obligations due to its inability to have access to the Subserviced Student Loans
Files. The Subservicer shall not be liable for any losses with respect to the
servicing of such Subserviced Student Loans arising after the release of the
related Subserviced Student Loan Files to the extent the losses are attributable
to the Servicer's inability to have access to the related Subserviced Student
Loan Files.
6. Duties of Subservicer. The Subservicer, for the benefit of the
Servicer and the Issuer (to the extent provided herein), shall manage, service,
administer and make collections
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on the Subserviced Student Loans with reasonable care, using that degree of
skill and attention that the Subservicer exercises with respect to similar
student loans that it services on behalf of the Servicer and the Issuer,
beginning on the date of this Agreement and continuing until the Subserviced
Student Loans are paid in full. Without limiting the generality of the foregoing
or of any other provision set forth in this Agreement and notwithstanding any
other provision to the contrary set forth herein, the Subservicer shall manage,
service, administer and make collections with respect to the Subserviced Student
Loans (including the collection of any Interest Subsidy Payments and Special
Allowance Payments on behalf of the Owner 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 Agreements, the failure to comply with which would
adversely affect the eligibility of one or more of the Subserviced Student Loans
for Federal reinsurance or Interest Subsidy Payments or Special Allowance
Payments or one or more of the Subserviced Student Loans for receipt of
Guarantee Payments.
The Subservicer's duties shall include, but shall not be limited to,
collection and posting of all payments, responding to inquiries of Borrowers on
such Subserviced 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 Servicer, the Administrator and the Issuer. The Subservicer shall
follow its customary standards, policies and procedures in performing its duties
as Subservicer. Without limiting the generality of the foregoing, the
Subservicer is authorized and empowered to execute and deliver, on behalf of
itself, the Issuer, the Owner Trustee, the Indenture Trustee, the Indenture
Administrator, 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 Subserviced Student Loans;
provided, however, that the Subservicer agrees that it will not (a) permit any
rescission or cancellation of a Subserviced Student Loan except as ordered by a
court of competent jurisdiction or governmental authority or as otherwise
consented to in writing by the Servicer, the Owner Trustee, the Indenture
Trustee and the Indenture Administrator, provided, however, that the Subservicer
may write off any delinquent Subserviced 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 Subserviced 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 Subservicer shall not agree to any reduction of yield with
respect to any Subserviced Student Loan (either by reducing Borrower payments or
reducing principal balance) except as permitted otherwise if, and to the extent,
the holder of the Trust Certificate, the Depositor, the Servicer, the
Subservicer or the Administrator reimburses the Issuer in an amount sufficient
to offset any such effective yield reduction made by the Subservicer consistent
with such customary servicing procedures as it follows with respect to
comparable student loans which it services on behalf of the Servicer. The
Servicer, on behalf of the Issuer, hereby grants a power of attorney and all
necessary authorization to the Subservicer to maintain any and all collection
procedures with respect to the Subserviced Student Loans, including filing,
pursuing and recovering claims with the Guarantors for Guarantee Payments and
with the Department for Interest Subsidy Payments and Special Allowance Payments
and
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taking any steps to enforce such Subserviced Student Loans such as commencing a
legal proceeding to enforce a Subserviced Student Loan in the names of the
Issuer, the Owner Trustee, the Indenture Administrator, the Indenture Trustee,
the Servicer and the Noteholders. The Servicer shall upon the written request of
the Subservicer furnish the Subservicer with any other powers of attorney and
other documents reasonably necessary or appropriate to enable the Subservicer to
carry out its servicing and administrative duties hereunder.
Until all Subserviced Student Loans serviced hereunder have been
repaid in full, or paid as a claim by a guarantor, or transferred to the
Servicer or another Subservicer, the Subservicer shall (a) cause to be furnished
to the Servicer such financial statements as the Servicer may reasonably
request, including quarterly unaudited financial statements within thirty (30)
days after the conclusion of each fiscal quarter, and annual financial
statements within ninety (90) days after the end of each fiscal year audited by
KPMG LLP or nationally recognized independent certified public accounts and such
other information with respect to its business affairs, assets, and liabilities
as the Servicer may reasonably request and (b) maintain books, records and
accounts necessary to prepare financial statements according to GAAP and
maintain adequate internal financial controls.
For the benefit of the Issuer, the Subservicer 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 SLC and
including all efforts that may be specified under the Higher Education Act or
Guarantee Agreement in its servicing of any delinquent Subserviced Student
Loans.
The Subservicer will do nothing to impair the rights granted to the
Noteholders under the Indenture, except for such actions as may be required by
the Higher Education Act or other applicable law.
The Subservicer will do nothing to impair the rights of the Issuer,
the Eligible Lender Trustee, the Owner Trustee, the Indenture Administrator, the
Indenture Trustee or the Noteholders in the Subserviced Student Loans.
7. Purchase of Subserviced Student Loans; Reimbursement. a. The
Subservicer and the Servicer shall give notice to the other party promptly, in
writing, upon the discovery of any breach of the provisions of Section 6 which
has a material 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 Subserviced Student Loan, the Subservicer shall purchase the
affected Subserviced Student Loan not later than 210 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 Subserviced Student Loan.
In the event of a material breach with respect to such Subserviced Student Loan
which is curable by reinstatement of the Guarantor's guarantee of such
Subserviced 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 Subserviced Student Loan, the Subservicer shall purchase such
Subserviced 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 Subserviced Student Loan plus accrued and unpaid interest
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(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 Subserviced Student Loan. In consideration of the purchase
of any such Subserviced Student Loan pursuant to this Section 7, the Subservicer
shall remit the Purchase Amount to the Servicer in the manner and at the time
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 Subserviced Student Loan will not be considered to have
a material adverse effect for purposes of this Section 7(a).
b. In addition, if any breach of Section 6 by the Subservicer 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 Subserviced
Student Loan affected by such breach, then the Subservicer shall reimburse the
Servicer 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 Subservicer and such forfeited Interest Subsidy Payments or
Special Allowance Payments remitting to the Servicer any 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 Subservicer 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
Subservicer 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 7 to the contrary notwithstanding, if as
of the last Business Day of any month the aggregate outstanding principal amount
of Subserviced Student Loans with respect to which claims have been filed with
and rejected by a Guarantor or with respect to which the Subservicer determines
that claims cannot be filed pursuant to the Higher Education Act as a result of
a breach by the Subservicer, Servicer or the Depositor, exceeds 1% of the Pool
Balance, the Subservicer, the Servicer or the Depositor, as appropriate, shall
purchase, within 30 days of a written request of the Owner Trustee, the
Indenture Trustee or the Indenture Administrator, such affected Subserviced
Student Loans in an aggregate principal amount such that after such purchase the
aggregate principal amount of such affected Subserviced Student Loans is less
than 1% of the Pool Balance. The Subserviced Student Loans to be purchased by
the Subservicer, the Servicer or the Depositor pursuant to the preceding
sentence shall be based on the date of claim rejection (or date of notice
referred to in the first sentence of this Section 7) with the Subserviced
Student Loans with the earliest such date to be purchased first.
d. In lieu of repurchasing Subserviced Student Loans pursuant to
this Section 7, the Subservicer may, at its option, with the prior consent of
the Servicer, arrange for
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the substitution of Student Loans which are substantially similar as of the date
of substitution on an aggregate basis to the Subserviced Student Loans for which
they are being substituted with respect to the following characteristics:
(1) status (i.e., in-school, grace, deferment, forbearance or
repayment),
(2) program type (i.e., unsubsidized or subsidized Xxxxxxxx
(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 Depositor in
the Sale Agreement. In choosing Student Loans to be substituted pursuant to this
subsection (d), the Subservicer 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 Subservicer elects to substitute Student Loans
pursuant to this Section 7 and the Servicer consents to such substitution, the
Subservicer will remit to the Servicer the amount of any shortfall between the
Purchase Amount of the substituted Student Loans and the Purchase Amount of the
Subserviced Student Loans for which they are being substituted. The Subservicer
shall also remit to the Servicer 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 Subservicer and forfeited Interest Subsidy Payments and Special
Allowance Payments with respect to the Subserviced Student Loans in the manner
provided in Section 2.6 of the Administration Agreement.
e. The sole remedy of the Servicer with respect to a breach pursuant
to Section 6 shall be to require the Subservicer to purchase Subserviced Student
Loans, to reimburse the Servicer as provided above or to substitute Student
Loans pursuant to this Section.
f. Neither the Owner Trustee, the Indenture Trustee nor the
Indenture Administrator shall have any duty to conduct any affirmative
investigation as to the occurrence of any condition requiring the purchase of
any Subserviced Student Loan or the reimbursement for any interest penalty
pursuant to this Section 7.
g. The Subservicer shall not be deemed to have breached its
obligations pursuant to Section 6 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 Subservicer shall diligently perform its duties
under this Agreement as soon as practicable following the termination of such
interruption of business.
8. Collection of Subserviced Student Loan Payments. The Subservicer
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
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provisions of the Subserviced Student Loans as and when the same shall become
due and shall follow such collection procedures as it follows with respect to
similar student loans that it services on behalf of the Servicer. The
Subservicer shall allocate collections with respect to the Subserviced Student
Loans between principal, interest and fees as described in Section 2.5 of the
Administration Agreement. The Subservicer may in its discretion waive any late
payment charge or any other fees that may be collected in the ordinary course of
servicing a Subserviced Student Loan. The Subservicer may, at its option, retain
any late payment charges that it collects.
The Subservicer 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 Subserviced 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 Servicer. In connection therewith, the Subservicer is hereby authorized and
empowered to convey to any Guarantor the note and the related Subserviced
Student Loan File representing any Subserviced 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
Subservicer shall constitute Available Funds for the applicable Collection
Period and shall be deposited into the Collection Account or transferred to the
Administrator as described in Section 2.4 of the Administration Agreement. The
Owner Trustee shall, upon the written request of the Servicer or the
Administrator, furnish the Subservicer with any power of attorney and other
documents necessary or appropriate to enable the Subservicer to convey such
documents to any Guarantor and to make such claims.
The Subservicer on behalf of the Servicer 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 of Education
with respect to any of the Subserviced 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 Subservicer follows with respect to similar
student loans that it services on behalf of the Servicer. All amounts so
collected by the Subservicer shall constitute Available Funds for the applicable
Collection Period and shall be deposited into the Collection Account or
transferred to the Administrator as described in Section 2.4 of the
Administration Agreement. In connection therewith, the Subservicer 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
Servicer and shall otherwise assist the Servicer in pursuing and collecting such
Interest Subsidy Payments and Special Allowance Payments from the Department.
The Servicer shall upon the written request of the Subservicer furnish the
Subservicer with any power of attorney and other documents reasonably necessary
or appropriate to enable the Subservicer to prepare and file such claims forms
and other documents and filings.
9. Right of Inspection; Audits. Upon reasonable prior notice, the
Servicer and the Administrator and their respective agents have the right to
access the Subserviced Student Loan Files and to examine and make copies of, and
abstracts from, the records and
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books of account of the Subservicer relating to the Subserviced Student Loans
and to undertake periodic site reviews of the Subservicer's operations relating
to the servicing of the Subserviced Student Loans (including on the premises of
any agent of the Subservicer), provided, however, that such activities shall not
unreasonably disrupt the Subservicer's normal business operation. The
Subservicer shall afford reasonable access to the Servicer and the Administrator
and their respective agents without charge, but only upon reasonable request and
during the normal business hours at the respective offices of the Subservicer.
Nothing in this Section shall affect the obligation of the Subservicer to
observe any applicable law prohibiting disclosure of information regarding the
Obligors and the failure of the Subservicer to provide access to information as
a result of such obligation shall not constitute a breach of this Section.
10. Reports. With respect to Subserviced Student Loans, the
Subservicer shall prepare reports and data and furnish the following information
to the Servicer, unless otherwise noted, at the specified times:
a. The reports and data listed in Attachment C to the Servicing
Agreement, 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 Servicer 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 therefore, the Subservicer shall furnish to the Servicer a list of all
Subserviced Student Loans (by borrower loan identification number, type and
outstanding principal balance) and any additional information requested relating
to the Subserviced Student Loans; and
e. From time to time as may be reasonably requested, reports and
data providing additional information on the Subserviced Student Loans.
11. Subservicer Certification. The Subservicer shall sign a
certification (in the form attached hereto as Exhibit A-3 or in such other form
as may be appropriate or necessary and as may be agreed upon by the Subservicer
and the Servicer as a result of changes promulgated by the SEC in the
Certification required to be filed with the Form 10-K, which are applicable to
the Issuer), for the benefit of the Servicer and its officers, directors and
Affiliates by March 15th of each year (or if not a Business Day, the immediately
preceding Business Day). In addition, the Subservicer shall indemnify and hold
harmless the Servicer, the Depositor and their respective officers, directors
and Affiliates from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs and expenses arising out of or based upon a breach of the
Subservicer's obligations under this Section 11 or the Subservicer's negligence,
bad faith or willful misconduct in connection therewith. If the indemnification
provided for herein is unavailable or insufficient to hold harmless the Servicer
or the Depositor, then the Subservicer agrees that it shall contribute to the
10
amount paid or payable to the Servicer or the Depositor, as applicable, as a
result of the losses, claims, damages or liabilities of such Servicer or
Depositor in such proportion as is appropriate to reflect the relative fault of
such Subservicer or Depositor on the one hand and the Subservicer on the other
in connection with a breach of the Subservicer's obligations under this Section
11 or the Subservicer's negligence, bad faith or willful misconduct in
connection therewith.
12. Compliance Report. The Subservicer agrees that it shall permit,
not more than once per year, the Servicer, the Issuer, the Indenture Trustee or
the Indenture Administrator, as the Indenture Trustee's designee, to conduct or
have conducted a procedural audit regarding the Subservicer's compliance with
the requirements of the Higher Education Act or the terms of this Agreement.
Such audits shall be at the expense of the Servicer.
13. Representations and Warranties of Subservicer. The Subservicer
makes the following representations, warranties and covenants to the Servicer on
the date of this Agreement. The Subservicer shall be deemed to have repeated the
representations and warranties on each date on which a new series of Notes is
issued under the Indenture.
a. The Subservicer is duly incorporated and validly existing as a
corporation 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 Subserviced Student
Loans and to hold the Subserviced Student Loan Files as custodian.
b. The Subservicer is duly qualified to do business and has obtained
all necessary licenses, permits, franchises and approvals in all jurisdictions
in which the ownership or lease of property or the conduct of its business
(including the servicing of the Subserviced Student Loans as required by this
Agreement) shall require such qualifications.
c. The Subservicer has the power and authority to execute and
deliver this Agreement and to carry out its terms, including without limitation,
eligibility as a third-party servicer under the Higher Education Act; and the
execution, delivery and performance of this Agreement have been duly authorized
by the Subservicer 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 Subservicer of this Agreement.
d. This Agreement constitutes a legal, valid and binding obligation
of the Subservicer enforceable in accordance with its terms subject to
bankruptcy, insolvency and other similar laws affecting creditors' rights
generally and subject to equitable principles.
e. 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 bylaws of the
Subservicer, or any indenture, agreement or other instrument to which the
Subservicer 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
11
or, to the best of the Subservicer's knowledge, any order, rule or regulation
applicable to the Subservicer of any court or of any Federal or state regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Subservicer or its properties.
f. No outstanding or unpaid judgments against the Subservicer exist
and there are no proceedings or investigations pending, or, to the Subservicer's
best knowledge, threatened, before any court, regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over the
Subservicer or its properties: (i) asserting the invalidity of this Agreement,
(ii) seeking to prevent the consummation of any of the transactions contemplated
by this Agreement, (iii) seeking any determination or ruling that could
reasonably be expected to have a material and adverse effect on the
Subservicer's financial condition or the performance by the Subservicer of its
obligations under, or the validity or enforceability of, this Agreement, or (iv)
relating to the Subservicer and which might adversely affect the Federal or
state income tax attributes of the Notes.
g. All Subservicer financial statements delivered to the Servicer
were prepared according to U.S. generally accepted accounting principles
("GAAP") consistently applied and present fairly, in all material respects, the
financial condition, results of operations and cash flows of the Subservicer as
of, and for the portion of the fiscal year ending on their date or dates
(subject, in the case of financial statements other than annual ones, only to
normal year-end adjustments).
h. No event which could cause a material adverse effect on the
Subservicer's financial condition has occurred, and if such event shall occur,
the Subservicer shall promptly give the Servicer and Issuer notice thereof.
14. Representations and Warranties of Servicer. The Servicer
represents and warrants to the Subservicer on the date of this Agreement:
a. The Servicer is duly incorporated and validly existing as a
corporation 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.
b. 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.
c. 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.
d. 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
12
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.
e. 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 bylaws 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.
15. Covenants and Agreements of the Servicer and Subservicer. The
Servicer and Subservicer each agree that:
a. Any payment and any communications received at any time by the
Servicer with respect to a Subserviced Student Loan shall be immediately
transmitted to the Subservicer. 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 Subservicer 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 the Subservicer continues to service the
Subserviced Student Loans in conformance with the requirements herein. The
Subservicer shall not make any material change in its servicing system and
operations with respect to the Subserviced Student Loans without the prior
written consent of the Servicer, which consent will not be unreasonably
withheld. Each written request for consent by the Subservicer shall be acted
upon promptly by the Servicer. Anything in this paragraph B to the contrary
notwithstanding, the Subservicer will not be required to request the consent of
the Servicer with respect to any changes in the Subservicer's servicing system
and operations which the Subservicer reasonably determines are required due to
changes in the Higher Education Act or Guarantor program requirements.
c. The Servicer will furnish the Subservicer with a copy of any and
all Guarantee Agreements relating to the Subserviced Student Loans serviced
hereunder.
d. The Subservicer may and, at the direction of the Servicer, shall
include marketing or informational material generally provided to borrowers of
loans owned by The Student Loan Corporation with communications sent to a
Borrower.
13
16. Subservicer Default. If any one of the following events (a
"Subservicer Default") shall occur and be continuing:
a. any failure by the Subservicer (i) to deliver to the Indenture
Trustee or the Indenture Administrator, as the case may be, 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 Subservicer from the Servicer, the Owner Trustee, the
Indenture Trustee, the Indenture Administrator or the Administrator or five
Business Days after discovery of such failure by an officer of the Subservicer;
or
b. any breach of a representation or warranty of the Subservicer
contained in Section 13 of this Agreement or failure by the Subservicer duly to
observe or to perform in any material respect any other term, covenant or
agreement of the Subservicer set forth in this Agreement, which breach or
failure shall (i) materially and adversely affect the rights of the Indenture
Trustee, on behalf of the Noteholders, or the Noteholders and (ii) continues
unremedied for a period of sixty (60) days after the date on which written
notice of such failure, requiring the same to be remedied, shall have been given
to the Subservicer by the Servicer, the Owner Trustee or the Administrator; or
c. an Insolvency Event occurs with respect to the Subservicer; or
d. any failure by the Subservicer to comply with any requirements
under the Higher Education Act resulting in a loss of its eligibility as a
third-party servicer;
then, and in each and every case, so long as the Subservicer Default shall not
have been remedied, the Servicer, by notice then given in writing to the
Subservicer, may terminate all the rights and obligations (other than the
obligations set forth in Section 24) of the Subservicer under this Agreement. As
of the effective date of termination of the Subservicer, all authority and power
of the Subservicer under this Agreement, whether with respect to the Notes or
the Subserviced Student Loans or otherwise, shall, without further action, pass
to and be vested in the Servicer or such successor subservicer as may be
appointed under Section 18 hereof. The predecessor Subservicer shall cooperate
with the successor subservicer, the Servicer and the Owner Trustee in effecting
the termination of the responsibilities and rights of the predecessor
Subservicer under this Agreement, including the transfer to the successor
subservicer for administration by it of all cash amounts that shall at the time
be held by the predecessor Subservicer for deposit, or shall thereafter be
received by it with respect to a Subserviced Student Loan. All reasonable costs
and expenses (including attorneys' fees) incurred in connection with
transferring the Subserviced Student Loan Files to the successor subservicer and
amending this Agreement and any other Basic Documents to reflect such succession
as Subservicer pursuant to this Section 16 shall be paid by the Subservicer
(other than the Indenture Administrator acting as the servicer under this
Section 16) upon presentation of reasonable documentation of such costs and
expenses.
14
17. Term. The term shall commence as of the date of this Agreement
and shall continue for an initial period of three (3) years. At the expiration
of the initial term, the term shall automatically extend for one (1) additional
year each year thereafter, unless either party gives ninety (90) days written
notice prior to the end of the initial term or any extension of the term.
18. Termination. This Agreement will terminate upon the occurrence
of the earlier of (i) termination of the Indenture; (ii) termination of the
Servicing Agreement; (iii) early termination pursuant to Sections 3(e) or 16
hereof; (iv) payment in full of all of the Subserviced Student Loans being
serviced hereunder; and (v) termination pursuant to Section 17 hereof.
The Subservicer's appointment as custodian shall become effective as
of the date of this Agreement and shall continue in full force and effect for so
long as Citibank USA, National Association shall remain the Subservicer
hereunder. If the Subservicer shall resign as Subservicer in accordance with the
provisions of this Agreement or if all the rights and obligations of the
Subservicer shall have been terminated under Section 16, the appointment of the
Subservicer as custodian shall be terminated simultaneously with the
effectiveness of such resignation or termination.
In the event of termination of this Agreement, the Servicer shall
remain liable for all fees due hereunder. Termination shall be made without
prejudice to any other rights or remedies either party may have at law or in
equity. The obligations of the Subservicer under Sections 4 and 5 hereof, and
the representations and warranties in Section 13 hereof, shall survive any
termination of this Agreement and shall remain in effect for all Subserviced
Student Loans while such Subserviced Student Loans are serviced by the
Subservicer. The rights and obligations of the Subservicer contained in Section
24 hereof shall survive termination of this Agreement. In the event of the
termination hereunder of the Subservicer, the Servicer shall appoint a successor
subservicer. In the event that servicing on any Subserviced Student Loan is
transferred to a successor subservicer, such successor subservicer shall be
required by the Servicer to engage in reasonable good faith efforts to obtain
payment on any claim initially rejected by a guarantor for payment including,
without limitation, involving the Subservicer in such effort, where the reason
for claim denial relates to the period during which the Subservicer serviced
such Subserviced Student Loan hereunder. However, if the cause for claim denial
is reasonably attributable to the Subservicer actions or inactions, the
Subservicer shall be responsible therefore.
19. Disposition of Files on Termination. On or prior to the
effective date of any resignation or termination of such appointment, the
Subservicer shall deliver the Subserviced Student Loan Files to the successor
subservicer or to the Servicer, at the direction of the Servicer, at such place
or places as the Servicer may reasonably designate. The Servicer shall be
responsible for payment of reasonable expenses related to the transfer of the
records unless the Servicer is removing the Subserviced Student Loans because of
a breach by the Subservicer. In such instance, the Subservicer shall bear the
cost of deconverting and transferring the Subserviced Student Loan Files. In
establishing an effective date for the termination of the Subservicer as
custodian of the Subserviced Student Loan Files, the parties shall provide for a
reasonable period for the Subservicer to deliver the Subserviced Student Loan
Files to the successor subservicer or to the Servicer.
15
20. Independent Contractor. The Subservicer is an independent
contractor and, except for the services which it agrees to perform hereunder,
the Subservicer does not hold itself out as an agent of any other party hereto.
Nothing herein contained shall create or imply an agency relationship between
the Subservicer and the Servicer, nor shall this Agreement be deemed to
constitute a joint venture or partnership between the parties.
21. Correspondence; Disclosure. The parties hereto acknowledge and
agree that the Subservicer will handle all communication with Borrowers
necessary to provide its services hereunder. Data regarding Subserviced Student
Loans shall be disclosed only to the Servicer, the Issuer, the Indenture
Trustee, the Indenture Administrator, the Administrator or the respective
Borrower, unless otherwise required by law or certain financing covenants.
22. Cooperation. Each party covenants and agrees to cooperate fully
with the other to facilitate the transactions contemplated by this Agreement.
23. Amendments. This Agreement may be amended, supplemented or
modified only by written instrument duly executed by the Servicer and the
Subservicer.
24. Indemnification and Liability. The Subservicer shall be liable
in accordance herewith only to the extent of the obligations specifically
undertaken by the Subservicer under this Agreement.
The Subservicer shall pay for any loss, liability, claim or expense
(including, without limitation, costs and expenses of litigation and of
investigation counsel fees, damages, judgments and amounts paid in settlement)
that may be imposed on, incurred by or asserted against the Servicer, the
Issuer, the Indenture Administrator, the Indenture Trustee, the Eligible Lender
Trustee or the Owner 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 Servicer, the Issuer, the Indenture Administrator, the
Indenture Trustee, the Eligible Lender Trustee or the Owner Trustee through, the
negligence, willful misfeasance or bad faith of the Subservicer 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 Servicer, the Issuer, the Indenture Administrator, the
Indenture Trustee, the Eligible Lender Trustee or the Owner Trustee through, any
such negligence, willful misfeasance, bad faith or recklessness on the part of
the Subservicer is established by a court of law, by an arbitrator or by way of
settlement agreed to by the Subservicer. Notwithstanding the foregoing, if the
Subservicer 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 Subservicer 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 Subservicer 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 the Subservicer as Subservicer pursuant to Section 16,
or a resignation by such Subservicer pursuant to this Agreement, such
Subservicer shall be deemed to be the Subservicer pending appointment of a
successor subservicer pursuant to Section 18.
16
Liability of the Subservicer under this Section shall survive the
resignation or removal of the Subservicer or the Servicer or the termination of
this Agreement. If the Subservicer 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 Subservicer, without interest.
The Subservicer shall not be under any liability to the Servicer,
the Issuer, the Noteholders, the Administrator, the Owner Trustee, the Indenture
Administrator, the Indenture Trustee or the Eligible Lender 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. The Subservicer 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 Subservicer 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 Subservicer 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 Subservicer is required to appear in or is
made a defendant in any legal action or other proceeding relating to the
servicing of the Subserviced Student Loans, the Servicer shall indemnify and
hold the Subservicer harmless from all cost, liability or expense of the
Subservicer not arising out of or relating to the failure of the Subservicer to
comply with the terms of this Agreement.
25. Confidentiality. The contents of this Agreement, together with
all supporting documents, exhibits, schedules, and any amendments thereto which
form the basis of the business relationship between the Servicer and the
Subservicer, insofar as the same relate to the fees charged by the Subservicer,
shall be held in confidence by both parties and shall not be disclosed or
otherwise discussed with any third party (unless required by law or regulation)
except outside counsel or independent accounts or in connection with the offer
and sale of securities issued or to be issued under the Indenture, without the
prior written consent of the other party.
26. Sale or Transfer of Loans; Limitations. The Servicer agrees that
if any Subserviced Student Loans are sold under conditions that result in the
Subserviced Student Loans being transferred to another Subservicer, whether
immediately or at some future date, the Servicer will pay or cause to be paid,
at the time such Subserviced Student Loans are transferred, any applicable
deconversion fees.
27. Insurance. The Subservicer 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.
17
28. Miscellaneous. a. Any material written communication received at
any time by the Servicer with respect to a Subserviced Student Loan or a
Borrower shall be promptly transmitted by the Servicer to the Subservicer. Such
communications include but are not limited to letters, notices of death or
disability, adjudication of bankruptcy and like documents, and forms requesting
deferment of repayment or loan cancellations.
b. 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.
c. All covenants contained herein, and the benefits, rights and
obligations of the Servicer hereunder, shall be binding upon and inure to the
benefit of the legal representatives, successors and assigns of the Servicer,
including but not limited to, any successor entity acquiring or succeeding to
the assets of the Servicer.
d. The Subservicer may not assign its rights or obligations
hereunder without obtaining the Servicer's prior written consent.
e. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original and all of which shall be deemed to
constitute one and the same instrument.
f. Except as permitted under Section 3(a), this Agreement
constitutes the entire agreement between the Servicer and the Subservicer. All
prior representations, statements, negotiations and undertakings with regard to
the subject matter hereof are superseded hereby.
g. If any provisions of this Agreement shall be held, or deemed to
be, or shall in fact be inoperative or unenforceable as applied in any
particular situation, such circumstance shall not have the effect of rendering
any other provision or provisions herein contained invalid, inoperative or
unenforceable to any extent whatsoever. The invalidity of any one or more
phrases, sentences, clauses or paragraphs herein contained shall have no effect
on the remaining portions of this Agreement or any part hereof.
h. All notices hereunder shall be given by United States certified
or registered mail, by facsimile 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 intended for the Servicer:
The Student Loan Corporation
000 Xxxxxxxxxx Xxxxxxxxx, 0xx xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxx XxXxxx
Fax No.: (000) 000-0000
18
If intended for the Subservicer:
Citibank USA, National Association
000 Xxxx 00xx Xxxxxx Xxxxx
Xxx 0, Xxxxx 0
Xxxxxxxx 00/Xxxxx 01/Zone 38
Sioux Falls, South Dakota 57117
Attention: Xxxx Xxxxxxxxxxxxxx
Fax No.: (000) 000-0000
Either party may change the address to which subsequent notices are to be sent
to it by written notice to the other given as aforesaid, but any such notice of
change, shall not be effective until the second business day after it is mailed.
i. This Agreement may not be terminated by any party hereto except
in the manner and with the effect herein provided.
j. When the context of this Agreement so requires or implies,
references to the Servicer include any applicable trustee.
k. If either party cannot fulfill its obligations (other than the
payment of money), in part or in whole, due to a force or event outside its
control, such obligations of that party shall be suspended and such party shall
not be liable to the other party for any failure to perform hereunder as a
result.
l. The parties hereto agree to execute or cause to be executed the
Limited Power of Attorney, attached hereto as Exhibit B.
m. The Subservicer has and agrees to maintain a disaster recovery
plan which, in its reasonable opinion, will permit it to continue operations
without undue interruption in the event of fire, disaster, labor disruption, or
Act of God.
n. 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.
o. No member of the board of directors or any officer, employee or
agent of the Subservicer or the Servicer (or any Affiliate of any such party)
shall be personally liable for any obligation incurred under this Agreement.
p. EACH PARTY TO THIS AGREEMENT WAIVES ITS RIGHT TO A JURY TRIAL.
19
IN WITNESS WHEREOF, the parties have hereunto set their hands by
their duly authorized officers as of the day and year first above written.
CITIBANK USA, NATIONAL
ASSOCIATION, as Subservicer,
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President, CitiCards
Chief Fin. Officer/ O&T Finance
THE STUDENT LOAN CORPORATION, as
Servicer
By: /s/ Xxxxxxx Xxxxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Treasurer
EXHIBIT A-1
SUBSERVICER REPORTS
A-1-1
EXHIBIT A-2
ANNUAL REPORTS
A-2-1
EXHIBIT A-3
FORM OF CERTIFICATION TO BE
PROVIDED TO DEPOSITOR BY SUBSERVICER
CERTIFICATION
SLC Student Loan Trust 2004-1
Student Loan Asset-Backed Notes (the "Notes")
I, [identify the certifying individual], a [title] of Citibank USA,
National Association (the "Subservicer"), certify to SLC Student Loan
Receivables I, Inc. and its officers, directors and affiliates, and with the
knowledge and intent that they will rely upon this certification (capitalized
terms used herein without definition shall have the meanings assigned to such
terms in the Subservicing Agreement, dated as of November 23, 2004 (the
"Subservicing Agreement"), between The Student Loan Corporation, as servicer,
and the Subservicer), that:
I have reviewed the servicing reports or information relating to the
Issuer delivered by the Subservicer to the Servicer covering the fiscal year
2004;
Based on my knowledge, the servicing information in these reports
delivered by the Subservicer, taken as a whole, does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading as of the last day of the period covered by these
servicing reports;
Based on my knowledge, the servicing information required to be
provided to the Servicer by the Subservicer under the Subservicing Agreement for
inclusion in the reports to be filed by the Indenture Trustee is included in the
servicing reports delivered by the Subservicer to the Servicer;
I am responsible for reviewing the activities performed by the
Subservicer under the Subservicing Agreement and based upon my knowledge and the
annual compliance review required under Section 3.2(a) of the Administration
Agreement with respect to the Subservicer, and except as disclosed in the
compliance certificate delivered by the Subservicer under Section 3.2(a) of the
Administration Agreement, the Subservicer has fulfilled its obligations under
the Subservicing Agreement in all material respects in the year to which such
review applies; and
A-3-1
The reports disclose all significant deficiencies relating to the
Subservicer's compliance with the minimum servicing standards based upon the
report provided by an independent public accountant, after conducting a review
in compliance with the attestation standards established by the American
Institute of Certificated Public Accountants, as set forth in the Administration
Agreement.
_____________________________________
Name:
Title:
A-3-2
EXHIBIT B
LIMITED POWER OF ATTORNEY
WITNESSETH:
WHEREAS, The Student Loan Corporation, a Delaware corporation (the
"Servicer") and Citibank USA, National Association, a national banking
association ("Subservicer"), are parties to the Subservicing Agreement, dated as
of November 23, 2004 (the "Subservicing Agreement"); and
WHEREAS, pursuant to the Subservicing Agreement, Subservicer will
perform substantially all of the obligations and duties with regard to servicing
of certain education loans (the "Subserviced Student Loans") as provided
therein; and
WHEREAS, in order to carry out its obligations under the
Subservicing Agreement with respect to the Subserviced Student Loans,
Subservicer requires the power to perform certain acts, including but not
limited to execution of promissory notes, assignment of notes to guarantors and
filing of responses to bankruptcy notices, in the name of Wilmington Trust
Company, as Owner trustee (the "Owner Trustee") for SLC Student Loan Trust
2004-1 (the "Issuer").
NOW THEREFORE, the Subservicer, Issuer and Owner Trustee agree:
That each of the Issuer and Owner Trustee do hereby make and appoint
Subservicer as its true and lawful attorney-in-fact to do all things necessary
to carry out Subservicer's obligations under the Subservicing Agreement with
respect to the Subserviced Student Loans, including but not limited to the
filing of proof of claim with bankruptcy courts. This instrument shall be
construed and interpreted as a limited power of attorney (the "Limited Power of
Attorney") and is not to be construed as granting any powers to Subservicer
other than those necessary to carry out its obligations under the Subservicing
Agreement with respect to the Subserviced Student Loans.
That this Limited Power of Attorney is effective as of ____, 200_
and shall remain in force and effect until revoked in writing by the Issuer or
Owner Trustee or until the Subservicing Agreement is terminated. This instrument
shall supplement but not replace the powers previously granted to Subservicer in
the Subservicing Agreement.
B-1
The undersigned, being duly authorized, has executed this Limited
Power of Attorney of ____, 200_.
SLC STUDENT LOAN TRUST 2004-1, as
Issuer
By: THE STUDENT LOAN CORPORATION, as
Administrator
By:
--------------------------------------
Name:
Title:
WILMINGTON TRUST COMPANY, as Owner
Trustee
By:
--------------------------------------
Name:
Title:
The undersigned, being duly authorized, accepts the foregoing
Limited Power of Attorney for and on behalf of Subservicer, as of ______, 200_.
CITIBANK USA, NATIONAL
ASSOCIATION, as Subservicer
By:
--------------------------------------
Name:
Title:
B-2
