Exhibit 99.2
MASTER SERVICING AGREEMENT
This MASTER SERVICING AGREEMENT (the "Master Servicing
Agreement") is entered into as of ________, 20__ by and between College Loan
Corporation, having its principal office in San Diego, California (the
"Servicer") and College Loan Corporation Trust 20__-__, a Delaware statutory
trust, having its principal office in Wilmington, Delaware (the "Issuer").
WITNESSETH:
WHEREAS, the Issuer acquires and holds 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, pursuant to this Master Servicing Agreement the Servicer will agree to
provide, or cause there to be provided, loan servicing services for certain
Student Loans; and
WHEREAS, the Issuer wishes to retain the Servicer to service certain Student
Loans owned by the Issuer as beneficial owner and by an eligible lender as
eligible lender trustee (such Student Loans subject to this Master Servicing
Agreement being referred to herein as the "Financed Student Loans"), and the
Servicer wishes to undertake the obligation to service or cause to be serviced
all such Financed 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 regulations and other requirements issued
by any applicable guaranty agency or insurer (collectively, the "Higher
Education Act") and under the terms hereinafter set forth; and
WHEREAS, the Servicer may subcontract with other third parties, to the extent
permitted by the hereinafter defined Indenture, to provide the services required
of Servicer hereunder;
NOW
THEREFORE, in consideration of the premises and mutual covenants contained
herein, the Issuer and the Servicer agree as follows:
1. |
Servicing Requirement and Employment of Servicer
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The Issuer hereby authorizes and appoints the Servicer to act as
its agent for the limited purpose of performing servicing for the Financed
Student Loans. The Servicer 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 Master
Servicing Agreement.
The authorization granted by this Master Servicing Agreement
includes, but is not limited to, correspondence and communication with any
guaranty agency or the U.S. Department of Education regarding the Financed
Student Loans, the assignment of claims to any guaranty agency or insurer,
communication with borrowers and any other communication, correspondence,
signature or other act required to service the Financed Student Loans in
accordance with requirements of the Higher Education Act or regulations
promulgated by any guaranty agency.
The Issuer hereby authorizes the Servicer to enter into
sub-servicing contracts to provide the services required of the Servicer
hereunder and to meet any obligations of the Issuer hereunder, including the
sub-servicing agreement, dated as of _________, 20__, between the Servicer and
________________, as sub-servicer (the "Sub-Servicer") permitted by the
Indenture of Trust dated as of ___________, 20__ (the "Indenture") between the
Issuer and _______________, as eligible lender trustee and indenture trustee
(together with its successors and assigns, the "Trustee").
The term of this Master Servicing Agreement shall commence as of
the date of this Master Servicing Agreement and shall continue for an initial
period of three (3) years. At the expiration of the initial term (including any
extensions thereof), the term shall automatically extend for one additional year
each year thereafter, unless either party gives 90 days written notice prior to
the end of the initial term or any extension of the term. The Servicer may,
concurrent with the beginning of any extension of the term, increase the
Servicing Fee (as defined below) by giving at least one hundred twenty (120)
days notice prior to the beginning of such extension of the term. In no case
will any individual fee charge or expense increase more than __% above the
immediately preceding fee developed in accordance with this Section or Section 3
below.
The representations and warranties of the Servicer in Section 7,
and the indemnities in Section 14 shall survive any termination of this Master
Servicing Agreement. If servicing of any Financed Student Loan is transferred to
a successor servicer, such successor servicer shall be required by the Issuer to
engage in good faith efforts to obtain payment on any claim initially rejected
by a guaranty agency or insurer for payment including, without limitation,
involving the Servicer in such effort, where the reason for claim denial relates
to the period during which the Servicer serviced such Financed Student Loan
hereunder.
3. |
Fees and Payment of Fees
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a. |
Initially the Servicer shall be entitled to a monthly fee equal to
__% of the ending principal balance of the Financed Student Loans, plus accrued
interest thereon as of the last day of the immediately preceding Collection
Period (the "Servicing Fee"). This fee may be increased with a Rating Agency
Confirmation. |
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b. |
Servicer shall submit an invoice monthly to the Issuer, and the
Issuer shall remit payment for services performed as shown on that invoice. |
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c. |
Payment is due within 30 days after receipt of the Billing
Package. The Billing Package shall consist of an invoice, and supporting
documentation. The Servicer shall be paid interest at a rate of prime + __% per
annum for fees not paid within sixty (60) days of the most recent Billing
Package. This charge shall apply to each thirty (30) day period until the fee is
paid. Prime rate will be the rate reported in the Wall Street Journal as of the
last business day of the month in which the Billing Package was received. |
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d. |
The Servicer acknowledges that the Issuer shall be entitled to
receive all payments of principal, interest, Special Allowance Payments and late
charges received with respect to the Financed Student Loans and that the
Servicer shall have no right to retain such amounts as payment of any fees due
to the Servicer from the Issuer under the terms of this Master Servicing
Agreement. The Issuer hereby authorizes the Servicer to assess, collect and
retain any charges which the Issuer is permitted by law or regulation to assess
with respect to not sufficient fund ("NSF") processing or other collection
costs. |
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e. |
If other costs beyond the control of the Servicer shall increase,
including, without limitation, postal rates, or the imposition of any tax or
assessment not currently being charged against the fees of the Servicer, then
the Servicer shall provide the Issuer with 90 days' prior written notice (and
including supporting documentation) of such proposed increased costs and
expenses. If the Issuer accepts such increased costs and expenses, the increased
costs and expenses will go into effect at the end of such 90 day period. If the
Issuer objects to such fee increase and the Servicer fails to agree to reduce or
eliminate the increase in a manner satisfactory to the Issuer, then an early
termination will occur and the Financed Student Loans will be deconverted at
cost within 180 days of receipt of said notice. The Issuer shall not be
permitted to so terminate this Master Servicing Agreement unless and until the
Issuer shall have entered into another agreement similar to this with the
Servicer or another Servicer satisfying the Rating Agency Confirmation. |
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f. |
If the Servicer's costs and expenses are increased due to changes
in the manner of servicing the Financed 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 90 days after delivery of written notice to
the Issuer the Servicer may increase servicing fees payable hereunder to
reasonably reflect such costs and expenses. However, no such increase shall take
effect until the Servicer provides supporting documentation to the Issuer 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 Master Servicing Agreement upon ninety (90) days' written notice
to the other party; provided, however, that this Master Servicing Agreement
shall not be so terminated by the Issuer unless and until the Issuer shall have
entered into another agreement similar to this with the Servicer or another
servicer satisfying the Rating Agency Confirmation.
If the Issuer believes the cost for services under this Master
Servicing Agreement are lower by changes in regulations, law or processing, the
Issuer will submit a proposed fee schedule to the Servicer. If the Servicer does
not reject the schedule, the fees will go into effect 90 days thereafter. |
The Servicer covenants and agrees to service each Financed
Student Loan in compliance with all requirements of the Higher Education Act and
all other applicable laws and regulations. Without limiting the foregoing, in
fulfillment of its obligations hereunder, the Servicer shall:
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a. |
Maintain a complete and separate file for the Financed Student
Loans of each borrower, which file shall include all documentation and
correspondence related to the Financed Student Loans. |
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b. |
Perform the actions necessary to maintain the guarantee and/or
insurance on each Financed Student Loan at all times. |
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c. |
Exercise "due diligence" as that term is defined in the Higher
Education Act, in the servicing, administration and collection of all Financed
Student Loans. See also Section 5. |
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d. |
Prepare and maintain accounting records with respect to the
Financed Student Loans; process refunds and other adjustments; process address
changes and maintain address records. |
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e. |
Collect, or cause to be collected, all payments of principal,
interest, Special Allowance Payments and late charges (and including any
guarantee payments) and deposit all such payments into the Collection Account
established with the Trustee under the Indenture or, in the case of Interest
Benefit Payments or Special Allowance Payments, cause such payments to be
forwarded to the Trustee. The Servicer shall remit collected funds by automated
clearing house (ACH) to the Trustee as the Servicer and Issuer shall mutually
agree. Upon submission by the Servicer to the Secretary of Education of a
billing for Interest Benefit Payments or Special Allowance Payments, the
Servicer shall, upon request, provide to the Trustee a written statement
indicating (i) the amount billed for Interest Benefit Payments and (ii) the
principal amount in each Special Allowance Payment category for which the
billing is submitted, for use by the Trustee in verifying amounts billed for and
received with respect thereto from the Secretary of Education. In the event of
discrepancies or disputes with the Secretary of Education, the Servicer shall be
responsible for representing the interests of the Issuer and the Trustee in
effecting a settlement with the Secretary of Education of such discrepancies or
disputes. |
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f. |
Retain summary records of contacts, follow-ups and collection
efforts, and records of written correspondence relating to the Financed Student
Loans of each borrower sufficient to ensure claim payment. |
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g. |
Process adjustments including NSF checks, status changes,
forbearances, deferments and Financed Student Loans paid in full. |
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h. |
Prepare and transmit to the Issuer or its designee documents
required by the U. S. Department of Education or any guaranty agency or the
Higher Education Act. |
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i. |
In the case of defaulted Financed Student Loans, promptly take the
actions necessary to file and prove a claim for loss with the guaranty agency as
required, and assume responsibility for communication and contact with the
guaranty agency to accomplish recovery on such defaulted Financed Student
Loans. |
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j. |
At all times identify the Issuer and the Eligible Lender Trustee
as the beneficial owner of the Financed Student Loan and identify the Trustee as
a party which maintains a security interest in the Financed Student Loan. |
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k. |
Maintain a duplicate or copy of the file (which may be in the form
of computer tape, microfilm or other electronic image) for each borrower at an
off-site location. |
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l. |
Maintain the original file in fireproof cabinets or in other
fireproof storage sufficient to protect the contents from a temperature of 1600
degrees Fahrenheit for one hour. |
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m. |
Prepare and furnish to the Issuer by the __ working day of each
month, the reports described in Exhibit A attached hereto related to the
Financed Student Loans. |
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n. |
(i) |
Obtain and maintain or cause to be obtained and maintained in
force a fidelity bond in an amount of at least $1,000,000 upon all personnel of
the Servicer insuring against any loss or damage which the Issuer or the
Servicer might suffer as a consequence of any fraudulent or dishonest act of
such personnel. |
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(ii) |
Obtain and maintain or cause to be obtained and maintained in
force Errors and Omissions insurance coverage in an amount equal to at least
$2,000,000 for all its customers. |
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o. |
Immediately respond to any communication received which is in the
nature of a complaint. Promptly answer all inquiries from borrowers or the
Issuer pertaining to the Financed Student Loans, disbursements, refunds or
school status. Such inquiries may, if necessary, be referred to the educational
institution the student attended or is attending. The Servicer shall have no
responsibility with respect to any dispute between the student and the
educational institution regarding tuition, fees or refunds. |
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p. |
Establish and maintain a method for charging and collecting late
payment fees in accordance with provisions of the Higher Education Act and all
other applicable laws and regulations. |
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q. |
The Servicer shall act as custodian and bailee with respect to all
original documents and shall hold them subject to the lien of the Indenture in
favor of the Trustee and pursuant to the Custodian Agreements substantially in
the form of Exhibit B hereto. The Servicer agrees to enter into any reasonable
custodian, bailment or similar agreement reasonably required by the Issuer with
respect to perfecting and protecting the security interests of any secured
party. |
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r. |
If any Financed Student Loan has lost its guarantee and/or
insurance due to the actions of any prior issuer or the servicer or holder of
the Financed Student Loan, the Servicer will, at the written request of the
Issuer, use its best efforts to reinstate such guarantee or insurance; provided,
however, that the Servicer makes no representation that such reinstatement will
occur. Such services shall be provided at the cost agreed upon by the Issuer and
the Servicer; provided that such services shall be provided by the Servicer at
no cost to the extent the Sub-Servicers or another servicer or sub-servicer is
required to provide such services to the Servicer at no cost. |
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s. |
Servicer shall remit monthly rebate fees to the United States
Department of Education with respect to the Financed Student Loans to the extent
amounts are made available to the Servicer in accordance with the following
sentence. Upon receipt of satisfactory documentation, the Issuer shall promptly
wire transfer to the Servicer, from amounts held under the Indenture, the amount
of funds required to pay such fees. The Servicer shall provide the Issuer, on a
monthly basis, with information needed to determine the monthly rebate
fees. |
The Servicer covenants and agrees that in discharging its
obligations hereunder it shall:
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a. |
Exercise due diligence in the servicing and collection of all
Financed Student Loans as the term "due diligence" is used in the Higher
Education Act, including the regulations of the applicable guaranty agency or
insurer. |
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b. |
Exercise reasonable care and diligence in the administration and
collection of all Financed Student Loans utilizing collection practices in
accordance with applicable Federal and State collection practices, laws and
regulations promulgated thereunder. |
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c. |
Administer and collect the Financed Student Loans in a competent,
diligent and orderly fashion, and in accordance with the requirements of the
Higher Education Act. |
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d. |
Exercise reasonable care and diligence in those aspects of the
administration of
the Financed Student Loan program which are within its area of responsibility. |
6. |
Right of Inspection; Audits |
The Issuer, the Trustee or any governmental agency having
jurisdiction over any of the same shall have the right from time to time during
normal business hours to examine and audit any of the Servicer's records
pertaining to any Financed Student Loan being serviced, provided, however, that
such activities shall not unreasonably disrupt the Servicer's normal business
operation.
The Servicer agrees that it shall permit, not more than once per
year, the Issuer, the Trustee or its designee to conduct or have conducted a
procedural audit regarding the Servicer's compliance with the requirements of
the Higher Education Act or the terms of this Master Servicing Agreement. Such
audits shall be at the expense of the Issuer.
7. |
Representations, Warranties, and Covenants of Servicer |
The Servicer represents and warrants to the Issuer on the date
of this Master Servicing Agreement and (except with respect to (d) and (e)
below) throughout the term of this Master Servicing Agreement:
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a. |
The Servicer (i) is duly incorporated, validly existing, and in
good standing under the laws of the jurisdiction in which it is incorporated;
(ii) is duly qualified to transact business and is in good standing as a foreign
corporation in each jurisdiction where the nature and extent of its business and
properties require due qualification and good standing; (iii) possesses all
requisite authority, permits and power to conduct its business as is now being
or as contemplated by this Master Servicing Agreement to be conducted; and (iv)
is in compliance with all applicable laws and regulations. |
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b. |
The execution and delivery by the Servicer of this Master
Servicing Agreement and the performance by it of its obligations hereunder (i)
are within its corporate power, (ii) have been duly authorized by all necessary
action, (iii) except for any action or filing that has been taken or made on or
before the date of this Master Servicing Agreement, require no action by or
filing with any governmental agency, and (iv) do not violate any provision of
its articles of incorporation. |
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c. |
This Master Servicing Agreement will, upon execution and delivery
by all parties thereto, constitute a legal and binding obligation of the
Servicer, enforceable against the Servicer according to its terms. |
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d. |
All Servicer financial statements delivered to the Issuer 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 Servicer 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). No event which could cause a material adverse effect on the
Servicer's financial condition has occurred, and if such event shall occur, the
Servicer shall promptly give the Issuer notice thereof. |
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e. |
The Servicer is not subject to, or aware of the threat of, any
litigation that is reasonably likely to be determined adversely to it and that,
if so adversely determined, would have a material adverse effect on its
financial condition and no outstanding or unpaid judgments against the Servicer
exist, and if such event shall occur, the Servicer shall promptly give the
Issuer notice thereof. |
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f. |
The Servicer's examination process did not disclose or create any
basis upon which to believe that each Financed Student Loan for which a
certificate has been delivered under the Custodian Agreements except as
indicated in such certificate, (i) is not in compliance in all material respects
with all laws and rules and regulations with respect to the guaranty thereof,
and (ii) does not conform to the applicable requirements of eligibility for
guaranty. |
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g. |
The Servicer further agrees to maintain its servicing system so
that it will continue to provide all services required under this Master
Servicing Agreement. |
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h. |
Until all Financed Student Loans serviced hereunder have been
repaid in full, or paid as a claim by a guaranty agency or insurer, or
transferred to another servicer, the Servicer agrees as follows: |
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(i) |
The Servicer shall cause to be furnished to the Issuer such
financial statements as the Issuer may reasonably request, including quarterly
unaudited financial statements within 30 days after the conclusion of each
quarter, and annually audited financial statements and such other information
with respect to its business affairs, assets, and liabilities as the Issuer may
reasonably request. |
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(ii) |
The Servicer shall maintain books, records and accounts necessary
to prepare financial statements according to GAAP. |
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(iii) |
The Servicer shall maintain all licenses, permits, and franchises
necessary for its business. |
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i. |
If and to the extent required by the Higher Education Act,
including any guarantee program regulations, the Servicer shall cause to have
prepared and shall submit to the Secretary of Education and the guaranty
agencies on or before the respective due dates thereof: |
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(i) |
any third-party servicer compliance audits and audited financial
statements required under the Higher Education Act, including any guarantee
program, regulations relating to the Servicer and its servicing of the Financed
Student Loans; and |
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(ii) |
any lender compliance audits required under the Higher Education
Act, including any guarantee program regulations, relating to the Eligible
Lender Trustee (as the titleholder of the Financed Student Loans) and the
Financed Student Loans.
The Servicer shall provide to the Trustee promptly after it
becomes available (and in no event later than 10 Business Days) a copy of each
such audit and any other audit or report required by the Secretary of Education,
any guaranty agency or other third party in connection with the Servicer's
activities in servicing the Financed Student Loans. |
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j. |
The Servicer shall provide to the Trustee copies of its annual
third party (SAS70) audit reports, if such reports are prepared, promptly
following the Servicer's receipt thereof. |
8. |
Representations and Warranties of Issuer |
The Issuer represents and warrants to the Servicer on the date
of this Master Servicing Agreement:
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a. |
The Issuer (i) is duly formed, validly existing, and in good
standing under the laws of the jurisdiction in which it is formed; (ii) is duly
qualified to transact business as a Delaware statutory trust; and (iii) possess
all requisite authority, permits and power to conduct its business as is now
being, or is contemplated by this Master Servicing Agreement to be,
conducted. |
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b. |
The execution and delivery by the Issuer of this Master Servicing
Agreement and the performance by it of its obligations hereunder (i) are within
its organizational power; (ii) have been duly authorized by all necessary
action; (iii) except for any action or filing that has been taken or made on or
before the date of this Master Servicing Agreement, require no action by or
filing with any governmental agency; and (iv) do not violate any provision of
its trust agreement. |
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c. |
This Master Servicing Agreement will, upon execution and delivery
by all parties thereto, constitute a legal and binding obligation of the Issuer,
enforceable against the Issuer according to its terms. |
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d. |
The Issuer is not subject to, or aware of the threat of, any
litigation that is reasonably likely to be determined adversely to it and that,
if so adversely determined, would have a material adverse effect on its
financial condition relevant to this Master Servicing Agreement. |
9. |
Amendments; Benefits; Assignment; Termination |
This Master Servicing Agreement may be amended, supplemented or
modified only by written instrument duly executed by the Issuer and the Servicer
with the consent of the Trustee, provided, however, that a Rating Agency
Confirmation is obtained.
Either party may terminate this Master Servicing Agreement if
the other party commits a material breach of this Master Servicing Agreement and
the breach is not corrected within ninety (90) days after receipt of written
notification that such breach has occurred; provided, however, that the Issuer
shall not terminate this Master Servicing Agreement unless and until a
replacement agreement or replacement servicer shall have been engaged by the
Issuer to perform the services required of the Servicer hereunder and the Rating
Agency Confirmation is satisfied. Such notification shall be by certified mail,
Return Receipt Requested.
In the event of termination of this Master Servicing Agreement,
the Issuer 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 Servicer under Section 6, the
representations and warranties in Section 7 and the indemnities in Section 14
shall survive any termination of this Master Servicing Agreement and shall
remain in effect for all Financed Student Loans while such Financed Student
Loans are serviced by the Servicer. In the event that servicing on any Financed
Student Loan is transferred to a successor servicer, such successor servicer
shall be required by the Issuer to engage in reasonable good faith efforts to
obtain payment on any claim initially rejected by a guaranty agency or insurer
for payment including, without limitation, involving the Servicer in such
effort, where the reason for claim denial relates to the period during which the
Servicer serviced such Financed Student Loan hereunder. However, if the cause
for claim denial is reasonably attributable to the Servicer actions or
inactions, the Servicer shall be responsible therefor. This Master Servicing
Agreement shall not be assigned by either party without the prior written
consent of the other party, and such consent shall not be unreasonably withheld.
10. |
Disposition of Files on Termination |
Upon termination of this Master Servicing Agreement, all files
(physical and electronic) held by the Servicer with respect to Financed Student
Loans shall be promptly transferred to the Issuer or its designee in such form
as the Issuer reasonably requests. The Issuer shall be responsible for payment
of reasonable expenses related to the transfer of the records unless the Issuer
is removing the Financed Student Loans because of a breach by the Servicer. In
such instance, the Servicer shall bear the cost of deconverting and the transfer
of loan documentation.
11. |
Independent Contractor |
The Servicer is an independent contractor and is not, and shall
not hold itself out to be, the agent of the Issuer except for the limited
specific purposes set forth in this Master Servicing Agreement.
12. |
Correspondence; Disclosure
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The parties hereto acknowledge and agree that the Servicer will
handle all communication with borrowers necessary to provide its services
hereunder. Data regarding Financed Student Loans shall be disclosed only to the
Issuer, the Trustee or the respective borrower, unless otherwise required by law
or certain financing covenants.
Each party covenants and agrees to cooperate fully with the
other to facilitate the transactions contemplated by this Master Servicing
Agreement.
14. |
Indemnification and Liability |
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a. |
If the Servicer is required to appear in, or is made a defendant
in any legal action or proceeding commenced by any party other than the Issuer
with respect to any matter arising hereunder, the Issuer shall indemnify and
hold the Servicer harmless from all loss, liability, or expense (including
reasonable attorney's fees, but excluding all incidental, special, and
consequential damages) except for any loss, liability or expense arising out of
or relating to the Servicer's willful misconduct or negligence with regard to
the performance of services hereunder or breach of its obligations hereunder or
under the Custodian Agreements. Subject to the limitations set forth in
paragraph 14(b) hereof, the Servicer shall indemnify and hold the Issuer and the
Delaware Trustee harmless from all loss, liability and expense (including
reasonable attorney's fees) arising out of or relating to the Servicer's willful
misconduct or negligence with regard to performance of services hereunder or
breach of its obligations hereunder or under the Custodian Agreements, provided
that in the case of the Issuer in no event shall the Servicer be responsible or
liable for any incidental, special or consequential damages with respect to any
matter whatsoever arising out of this Master Servicing Agreement. |
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b. |
If a Financed Student Loan is denied the guarantee by the guaranty
agency or the loss of federal interest, special allowance, and/or insurance
benefits, the Servicer shall have the right to take any action not prohibited by
law or regulation to reduce its losses, if any, hereunder, including but not
limited to curing, at its own expense, any due diligence or other servicing
violation. If any lost guarantee is not reinstated within nine months of the
date the Servicer learns of the loss of the guarantee on a Financed Student
Loan, the Servicer shall take actions which make the Issuer whole with respect
to the Financed Student Loan while maintaining the eligibility for future
reinstatement of the guarantee; provided, however, the Servicer may delay taking
such actions by giving written notice to the Issuer not less often than each 90
days that the Servicer has reason to believe that the guarantee will be
reinstated within time frames permitted by regulations. If the Servicer gives
notice of such delay, the Servicer agrees to pay any accrued interest on the
account that may be uninsured. The Issuer agrees to use its best efforts to
cause the repurchase, at par plus insured interest and benefits thereon, of any
Financed Student Loan which is cured and is reinsured subsequent to its sale by
the Issuer pursuant to actions taken by the Servicer to make the Issuer whole
and if the sale was to an eligible lender to the extent the Issuer has, or can
make available, funds therefor. |
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c. |
The Servicer shall have no responsibility for any error or
omission (including due diligence violations) which occurred prior to the date
the Servicer assumed responsibility for servicing the Financed Student Loan, nor
shall the Servicer be responsible for losses, damages or expenses arising from
any change in law or regulation which retroactively imposes additional
requirements for documentation or servicing actions, provided that the Servicer
has made best efforts to comply with retroactive additional requirements. |
The contents of this Master Servicing Agreement, together with
all supporting documents, exhibits, schedules, and any amendments thereto which
form the basis of the business relationship between the Issuer and the Servicer,
insofar as the same relate to the Servicing Fee, shall be held in strict
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 without the prior written consent of the other
party.
16. |
Sale or Transfer of Loans; Limitations |
The Issuer agrees that if any Financed Student Loans are sold
under conditions that result in the Financed Student Loans being transferred to
another servicer, whether immediately or at some future date, the Issuer will
pay or cause to be paid, at the time such Financed Student Loans are
transferred, the deconversion fees, which are to be provided by the Servicer.
The Servicer shall prepare on behalf of the Issuer any
Asset-Backed Issuer Distribution Report on Form 10-D (each, a "Form 10-D") and
Annual Reports on Form 10-K customary for student loan asset-backed securities
as required by the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), the rules and regulations of the Securities and Exchange Commission
thereunder and Regulation AB, and the Servicer shall sign and file (via the
Securities and Exchange Commission's Electronic Data Gathering and Retrieval
System) such forms on behalf of the Issuer.
Each Form 10-D shall be filed by the Servicer within 15 days
after each distribution date under the Indenture (or if such 15th day is not a
business day, the next business day), and shall include a copy of the report
prepared for the related period pursuant to Section __ of the Indenture.
The Servicer and the Issuer acknowledge and agree that the
purpose of Section 17 of this Agreement is to facilitate compliance by the
Issuer with the provisions of Regulation AB and related rules and regulations of
the Securities and Exchange Commission. Neither the Servicer nor the Issuer
shall exercise its right to request delivery of information or other performance
under these provisions other than in good faith, or for purposes other than
compliance with the Securities Act of 1933, as amended, the Exchange Act and the
rules and regulations of the Securities and Exchange Commission thereunder. The
Servicer acknowledges that interpretations of the requirements of Regulation AB
may change over time, whether due to interpretive guidance provided by the
Securities and Exchange Commission or its staff, consensus among participants in
the asset-backed securities markets, advice of counsel, or otherwise, and agrees
to comply with requests made by the Issuer in good faith for delivery of
information under these provisions on the basis of evolving interpretations of
Regulation AB. In connection therewith, the Servicer shall cooperate fully with
the Issuer, to deliver to the Issuer (including any of its assignees or
designees) any and all statements, reports, certifications, records and any
other information necessary in the good faith determination of the Issuer to
permit the Issuer to comply with the provisions of Regulation AB, together with
such disclosures relating to the Servicer and/or any Sub-Servicer or the
servicing of the Financed Student Loans, reasonably believed by the Issuer to be
necessary in order to effect such compliance.
The Issuer (including any of its assignees or designees) shall
cooperate with the Servicer by providing timely notice of requests for
information under these provisions and by reasonably limiting such requests to
information required, in the Issuer's reasonable judgment, to comply with
Regulation AB.
If so requested by the Issuer for the purpose of satisfying its
reporting obligation under the Exchange Act, the Servicer shall (or shall cause
each Sub-Servicer to) (i) notify the Issuer in writing of any material
litigation or governmental proceedings pending against the Servicer and any
Sub-Servicer and (ii) provide to the Issuer a description of such
proceedings, affiliations or relationships.
As a condition to the succession to Servicer or any Sub-Servicer
by any person (i) into which the Servicer or such Sub-Servicer may be
merged or consolidated, or (ii) which may be appointed as a successor to
the Servicer or any Sub-Servicer, the Servicer shall provide to the Issuer, at
least 10 Business Days prior to the effective date of such succession or
appointment, (x) written notice to the Issuer of such succession or
appointment and (y) in writing and in form and substance reasonably
satisfactory to the Issuer all information reasonably requested by the Issuer in
order to comply with its reporting obligation under Item 6.02 of
Form8-K.
In addition to such information as the Servicer is obligated to
provide pursuant to other provisions of this Agreement, if so requested by the
Issuer, the Servicer and any Sub-Servicer shall provide such information
regarding the performance or servicing of the Financed Student Loans as is
reasonably required to facilitate preparation of distribution reports in
accordance with Item 1121 of Regulation AB.
On or before March 31 of each calendar year, commencing in 20__,
the Servicer shall deliver to the Issuer a statement of compliance addressed to
the Issuer and signed by an authorized officer of the Servicer, to the effect
that (i) a review of the Servicer's activities during the immediately
preceding calendar year (or applicable portion thereof) and of its performance
under this Agreement during such period has been made under such officer's
supervision, and (ii) to the best of such officer's knowledge, based on
such review, the Servicer has fulfilled all of its obligations under this
Agreement in all material respects throughout such calendar year (or applicable
portion thereof) or, if there has been a failure to fulfill any such obligation
in any material respect, specifically identifying each such failure known to
such officer and the nature and the status thereof and shall facilitate the
delivery of any required statement of compliance by each Sub-Servicer.
On or before March 1 of each calendar year, commencing in 20__,
the Servicer shall:
|
(i) |
deliver to the Issuer a report (in form and substance reasonably
satisfactory to the Issuer) regarding the Servicer's assessment of compliance
with the Servicing Criteria (as defined on Exhibit D hereto) during the
immediately preceding calendar year, as required under Rules 13a-18 and 15d-18
of the Exchange Act and Item 1122 of Regulation AB. Such report shall be
addressed to the Issuer and signed by an authorized officer of the Servicer, and
shall address each of the Servicing Criteria specified on a certification
substantially in the form of Exhibit D attached to this Agreement; |
|
(ii) |
deliver to the Issuer a report of a registered public accounting
firm, that attests to, and reports on, the assessment of compliance made by the
Servicer and delivered pursuant to the preceding paragraph. Such attestation
shall be in accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under
the Securities Act and the Exchange Act; |
|
(iii) |
cause each Sub-Servicer, determined by the Servicer to be
"participating in the servicing function" within the meaning of Instruction 2 to
Item 1122 of Regulation AB, to deliver to the Issuer an assessment of
compliance and accountants' attestation as and when provided in
paragraphs (1) and (2) of this Section; and |
|
(iv) |
deliver to the Issuer and any other person that will be
responsible for signing the Xxxxxxxx-Xxxxx Certification on behalf of an Issuer
with respect to this securitization transaction the Annual Certification in the
form attached hereto as Exhibit E. |
The Servicer acknowledges that the parties identified in
clause(iv) above may rely on any certification provided by the Servicer or
any Sub-Servicer pursuant to such clause in signing a Xxxxxxxx-Xxxxx
Certification and filing such with the Commission.
The items set forth in clauses (i) through (iv) above will not
be required unless the Depositor is required under the Exchange Act to file an
annual report on Form10-K with respect to an Issuing Entity whose asset
pool includes the Financed Student Loans.
Each assessment of compliance provided by a Sub-Servicer shall
address each of the Servicing Criteria specified on a certification to be
delivered to the Servicer, the Issuer on or prior to the date of such
appointment.
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a. |
Any material written communication received at any time by the
Issuer with respect to a Financed Student Loan or a borrower shall be promptly
transmitted by the Issuer to the Servicer. 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 Master Servicing Agreement shall be governed by the laws of
the State of New York. |
|
c. |
All covenants and Master Servicing Agreements herein contained and
the benefits, rights and obligations of the parties hereunder, shall be binding
upon and inure to the benefit of the legal representatives, successors and
assigns of the parties hereto, including but not limited to, any successor
entity acquiring or succeeding to the assets of either party. |
|
d. |
The Master Servicing Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall
be deemed to constitute but one and the same instrument. |
|
e. |
If any provisions of the Master Servicing 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 the Master Servicing Agreement or any part
hereof. |
|
f. |
All notices, requests, demands or other instruments which may or
are required to be given by either party to the other, shall be in writing and
each shall be deemed to have been properly given when served personally on an
officer of the party to whom such notice is to be given, or upon expiration of a
period of 48 hours (excluding weekends and holidays) from and after the postmark
thereof when mailed postage prepaid by registered or certified mail, requesting
return receipt, addressed as follows: |
|
If intended for the Issuer:
[TO BE PROVIDED]
If intended for the Servicer:
College Loan Corporation
00000 Xxxx Xxxxxxxx Xxxxx
Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx
Attn: Xxxx Xxxx
If intended for the Trustee:
[TO BE PROVIDED] |
|
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, if sent by mail, shall not be effective until the 5th day
after it is mailed.
|
g. |
The Master Servicing Agreement may not be terminated by any party
hereto except in the manner and with the effect herein provided. |
h. |
When the context of this Master Servicing Agreement so requires or
implies, references to the Issuer include any applicable trustee.
|
i. |
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.
|
j. |
The parties hereto agree to execute or cause to be executed the
Limited Power of Attorney attached hereto as Exhibit C.
|
k. |
The Servicer 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.
|
l. |
Servicer may cause any of its duties or obligations hereunder to
be performed by a sub-servicer so long as permitted by the Indenture.
|
m. |
Any term capitalized but not defined herein shall have the meaning
ascribed thereto in the Indenture.
|
n. |
It is expressly understood and agreed by the parties to this
Master Servicing Agreement that (a) this Master Servicing Agreement is executed
and delivered by _________________________ ("___"), not individually or
personally but solely as Delaware Trustee of the Issuer, in the exercise of the
powers and authority conferred and vested in it as Delaware Trustee, (b) each of
the representations, undertakings and agreements herein made on the part of the
Issuer is made and intended not as personal representations, undertakings and
agreements by ___ but is made and intended for the purpose of binding only the
Issuer, (c) nothing herein contained shall be construed as creating any
liability on ___, individually or personally, to perform any covenant either
expressed or implied contained herein, all such liability, if any, being
expressly waived by the parties to this Master Servicing Agreement and by any
person claiming by, through or under the parties to this Master Servicing
Agreement and (d) under no circumstances shall ___ be personally liable for the
payment of any indebtedness or expenses of the Issuer or be liable for the
breach or failure of any obligation, representation, warranty or covenant made
or undertaken by the Issuer under this Master Servicing Agreement or any other
document.
|
o. |
The Master Servicer will not, prior to the date which is one year
and one day after the termination of the Indenture, institute against the Issuer
any bankruptcy proceedings under any United States Federal or state bankruptcy
or similar law in connection with any obligations relating to this Agreement.
|
Each party to this Master Servicing Agreement waives its
right to jury trial.
IN WITNESS WHEREOF, the parties have hereunto set their hands by
their duly authorized officers as of the day and year first above written.
|
COLLEGE LOAN CORPORATION TRUST 20__-__ ("Issuer")
BY: ___________________, not in its individual
capacity but solely as Delaware
Trustee
BY:______________________________________
COLLEGE LOAN CORPORATION ("Servicer")
BY:______________________________________ |
EXHIBIT A
REPORTS
Such
standard reports as may subsequently be agreed upon by the Issuer and the
Servicer.
EXHIBIT B
CUSTODIAN AGREEMENT
EXHIBIT C
LIMITED POWER OF ATTORNEY
WITNESSETH:
WHEREAS, College Loan Corporation, a California corporation ("CLC") and College
Loan Trust 20__-__, a Delaware Statutory trust (the "Issuer"), are parties to
the MASTER SERVICING AGREEMENT dated as of ________, 20__ (the "Master
Servicing Agreement"); and
WHEREAS, pursuant to the Master Servicing Agreement, CLC will perform
substantially all of the obligations and duties with regard to servicing of
certain education loans (the "Financed Student Loans")as provided therein;
and
WHEREAS, in order to carry out its obligations under the Master Servicing
Agreement with respect to the Financed Student Loans, CLC requires the power to
perform certain acts, including but not limited to execution of promissory
notes, assignment of notes to guaranty agencies or insurers and filing of
responses to bankruptcy notices, in the name of ___________________, as eligible
lender trustee for the Issuer.
NOW
THEREFORE, CLC and the Issuer agree:
1. That the Issuer does hereby make and appoint CLC as its true
and lawful attorney-in-fact to do all things necessary to carry out CLC's
obligations under the Master Servicing Agreement with respect to the Financed
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 CLC other than those necessary to carry out
its obligations under the Master Servicing Agreement with respect to the
Financed Student Loans.
2. That this Limited Power of Attorney is effective as of
__________, 20__, and shall remain in force and effect until revoked in writing
by the Issuer or until the Master Servicing Agreement is terminated. This
instrument shall supplement but not replace the powers previously granted to CLC
in the Master Servicing Agreement.
The
undersigned, being duly authorized, has executed this Limited Power of
Attorney.
COLLEGE LOAN TRUST 20__-__ ("Issuer")
BY: _______________________, not in its individual
Capacity but solely as Delaware Trustee
BY: ______________________________________ |
The undersigned, being duly
authorized, accepts the foregoing Limited Power of Attorney for and on behalf of College
Loan Corporation, as of __________, 20__.
College Loan Corporation
By:________________________________
For _________________________, as Eligible Lender Trustee for College Loan Corporation
By:_______________________________
EXHIBIT D
SERVICING CRITERIA TO BE ADDRESSED IN
ASSESSMENT OF COMPLIANCE
The
assessment of compliance to be delivered by the Servicer shall address, at a
minimum, the criteria identified below (the "Servicing Criteria"):
Reference |
Criteria |
Applicability |
General Servicing Considerations
1122(d)(1)(i) |
Policies and procedures are instituted to monitor any performance
or other triggers and events of default in accordance with the Basic
Documents. |
|
1122(d)(1)(ii) |
If any material servicing activities are outsourced to third
parties, policies and procedures are instituted to monitor the third party's
performance and compliance with such servicing activities. |
|
1122(d)(1)(iii) |
Any requirements in the Basic Documents to maintain a back-up
servicer for the trust student loans are maintained. |
|
1122(d)(1)(iv) |
A fidelity bond and errors and omissions policy is in effect on
the party participating in the servicing function throughout the reporting
period in the amount of coverage required by and otherwise in accordance with
the terms of the transaction agreements. |
|
Cash Collection and Administration
1122(d)(2)(i) |
Payments on trust student loans are deposited into the appropriate
custodial bank accounts and related bank clearing accounts no more than two
business days following receipt, or such other number of days specified in the
Basic Documents. |
|
1122(d)(2)(ii) |
Disbursements made via wire transfer on behalf of an obligor or to
an investor are made only by authorized personnel. |
|
1122(d)(2)(iii) |
Advances of funds or guarantees regarding collections, cash flows
or distributions, and any interest or other fees charged for such advances, are
made, reviewed and approved as specified in the Basic Documents. |
|
1122(d)(2)(iv) |
The related accounts for the transaction, such as cash reserve
accounts or accounts established as a form of overcollateralization, are
separately maintained (e.g., with respect to commingling of cash) as set forth
in the Basic Documents. |
|
1122(d)(2)(v) |
Each custodial account is maintained at a federally insured
depository institution as set forth in the Basic Documents. For purposes of this
criterion, "federally insured depository institution" with respect to a foreign
financial institution means a foreign financial institution that meets the
requirements of Rule 13k-1(b)(1) of the Securities Exchange Act. |
|
1122(d)(2)(vi) |
Unissued checks are safeguarded so as to prevent unauthorized
access. |
|
1122(d)(2)(vii) |
Reconciliations are prepared on a monthly basis for all
asset-backed securities related bank accounts, including custodial accounts and
related bank clearing accounts. These reconciliations are (A) mathematically
accurate; (B) prepared within 30 calendar days after the bank statement cutoff
date, or such other number of days specified in the Basic Documents; (C)
reviewed and approved by someone other than the person who prepared the
reconciliation; and (D) contain explanations for reconciling items. These
reconciling items are resolved within 90 calendar days of their original
identification, or such other number of days specified in the Basic
Documents. |
|
Investor Remittances and Reporting
1122(d)(3)(i) |
Reports to investors, including those to be filed with the
Commission, are maintained in accordance with the Basic Documents and applicable
Commission requirements. Specifically, such reports (A) are prepared in
accordance with timeframes and other terms set forth in the Basic Documents; (B)
provide information calculated in accordance with the terms specified in the
Basic Documents; (C) are filed with the Commission as required by its rules and
regulations; and (D) agree with investors' or the trustee's records as to the
total unpaid principal balance and number of student loans serviced by the
Servicer. |
|
1122(d)(3)(ii) |
Amounts due to investors are allocated and remitted in accordance
with timeframes, distribution priority and other terms set forth in the Basic
Documents. |
|
1122(d)(3)(iii) |
Disbursements made to an investor are posted within two business
days to the Servicer's investor records, or such other number of days specified
in the Basic Documents. |
|
1122(d)(3)(iv) |
Amounts remitted to investors per the investor reports agree with
cancelled checks, or other form of payment, or custodial bank statements. |
|
Pool Asset Administration
1122(d)(4)(i) |
Collateral or security on student loans is maintained as required
by the Basic Documents or related student loan documents. |
|
1122(d)(4)(ii) |
Student loan and related documents are safeguarded as required by
the Basic Documents |
|
1122(d)(4)(iii) |
Any additions, removals or substitutions to the asset pool are
made, reviewed and approved in accordance with any conditions or requirements in
the Basic Documents. |
|
1122(d)(4)(iv) |
Payments on student loans, including any payoffs, made in
accordance with the related student loan documents are posted to the Servicer's
obligor records maintained no more than two business days after receipt, or such
other number of days specified in the Basic Documents, and allocated to
principal, interest or other items (e.g., escrow) in accordance with the related
student loan documents. |
|
1122(d)(4)(v) |
The Servicer's records regarding the student loans agree with the
Servicer's records with respect to an obligor's unpaid principal balance. |
|
1122(d)(4)(vi) |
Changes with respect to the terms or status of an obligor's
student loans (e.g., loan modifications or re-agings) are made, reviewed and
approved by authorized personnel in accordance with the Basic Documents and
related pool asset documents. |
|
1122(d)(4)(vii) |
Loss mitigation or recovery actions (e.g., forbearance plans,
modifications and deeds in lieu of foreclosure, foreclosures and repossessions,
as applicable) are initiated, conducted and concluded in accordance with the
timeframes or other requirements established by the Basic Documents. |
|
1122(d)(4)(viii) |
Records documenting collection efforts are maintained during the
period a student loan is delinquent in accordance with the Basic Documents. Such
records are maintained on at least a monthly basis, or such other period
specified in the Basic Documents, and describe the entity's activities in
monitoring delinquent student loans including, for example, phone calls, letters
and payment rescheduling plans in cases where delinquency is deemed temporary
(e.g., illness or unemployment). |
|
1122(d)(4)(ix) |
Adjustments to interest rates or rates of return for student loans
with variable rates are computed based on the related student loan
documents. |
|
1122(d)(4)(x) |
Regarding any funds held in trust for an obligor (such as escrow
accounts): (A) such funds are analyzed, in accordance with the obligor's student
loan documents, on at least an annual basis, or such other period specified in
the Basic Documents; (B) interest on such funds is paid, or credited, to
obligors in accordance with applicable student loan documents and state laws;
and (C) such funds are returned to the obligor within 30 calendar days of full
repayment of the related student loans, or such other number of days specified
in the Basic Documents. |
|
1122(d)(4)(xi) |
Payments made on behalf of an obligor (such as tax or insurance
payments) are made on or before the related penalty or expiration dates, as
indicated on the appropriate bills or notices for such payments, provided that
such support has been received by the servicer at least 30 calendar days prior
to these dates, or such other number of days specified in the Basic
Documents. |
|
1122(d)(4)(xii) |
Any late payment penalties in connection with any payment to be
made on behalf of an obligor are paid from the servicer's funds and not charged
to the obligor, unless the late payment was due to the obligor's error or
omission. |
|
1122(d)(4)(xiii) |
Disbursements made on behalf of an obligor are posted within two
business days to the obligor's records maintained by the servicer, or such other
number of days specified in the Basic Documents. |
|
1122(d)(4)(xiv) |
Delinquencies, charge-offs and uncollectible accounts are
recognized and recorded in accordance with the Basic Documents. |
|
1122(d)(4)(xv) |
Any external enhancement or other support, identified in Item 1114(a)(1) through
(3) or Item 1115 of Regulation AB, is maintained as set forth in the Basic
Documents. |
|
|
COLLEGE LOAN CORPORATION,
not in its individual capacity but solely
as Servicer
Date: ________________________
By: ___________________________________
Name:
Title: |
EXHIBIT
E
FORM OF
ANNUAL CERTIFICATION
|
Re: |
The Master Servicing Agreement dated as of ________, 20__ (the
"Agreement"), between College Loan Corporation and College Loan Trust 20__-__
(the "Issuer") |
I,
[__________], the [__________] of College Loan Corporation (the "Servicer"),
certify to the Issuer that:
1. I have reviewed the servicer compliance statement of
the Servicer provided in accordance with Item 1123 of Regulation AB (the
"Compliance Statement"), the report on assessment of the Servicer's compliance
with the servicing criteria set forth in Item 1122(d) of Regulation AB (the
"Servicing Criteria"), provided in accordance with Rules 13a-18 and 15d-18 under
Securities Exchange Act of 1934, as amended (the "Exchange Act") and Item 1122
of Regulation AB (the "Servicing Assessment"), the registered public accounting
firm's attestation report provided in accordance with Rules 13a-18 and 15d-18
under the Exchange Act and Item 1122(b) of Regulation AB (the "Attestation
Report"), and all servicing reports, officer's certificates and other
information relating to the servicing of the student loans by the Servicer
during [20__] that were delivered by the Servicer to the Issuer pursuant to the
Agreement (collectively, the "Company Servicing Information");
2. Based on my knowledge, the Company Servicing
Information, 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 the light of the circumstances under which such statements were made,
not misleading with respect to the period of time covered by the Company
Servicing Information;
3. Based on my knowledge, all of the Company Servicing
Information required to be provided by the Servicer under the Agreement has been
provided to the Issuer;
4. I am responsible for reviewing the activities
performed by the Servicer under the Agreement, and based on my knowledge and the
compliance review conducted in preparing the Compliance Statement and except as
disclosed in the Compliance Statement, the Servicing Assessment or the
Attestation Report, the Servicer has fulfilled its obligations under the
Agreement in all material respects; and
5. The Compliance Statement required to be delivered by
the Servicer pursuant to the Agreement, and the Servicing Assessment and
Attestation Report required to be provided by the Servicer and by any
Sub-Servicer pursuant to the Agreement, have been provided to the Issuer. Any
material instances of noncompliance described in such reports have been
disclosed to the Issuer. Any material instance of noncompliance with the
Servicing Criteria has been disclosed in such reports.