Exhibit 99.2
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SERVICING AGREEMENT
among
XXXXXX XXX SERVICING L.P.,
XXXXXX MAE, INC.,
as Administrator
SLM PRIVATE CREDIT STUDENT LOAN TRUST 200___-___,
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION,
not in its individual capacity
but solely as Trustee [and Eligible LenderTrustee]
and
JPMORGAN CHASE BANK,
not in its individual capacity
but solely as Indenture Trustee
Dated as of ______________ ____, 200___
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TABLE OF CONTENTS
Page
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ARTICLE I
Section 1.1 Definitions and Usage ....................................... 1
ARTICLE II
Section 2.1 Custody of Trust Student Loan Files ......................... 1
Section 2.2 Duties of Servicer as Custodian ............................. 2
Section 2.3 Maintenance of and Access to Records ........................ 2
Section 2.4 Release of Documents ........................................ 3
Section 2.5 Instructions; Authority To Act .............................. 3
Section 2.6 [RESERVED] .................................................. 3
Section 2.7 Effective Period and Termination ............................ 3
ARTICLE III
Section 3.1 Duties of Servicer .......................................... 3
Section 3.2 Collection of Trust Student Loan Payments ................... 5
Section 3.3 Realization upon Trust Student Loans ........................ 6
Section 3.4 No Impairment ............................................... 6
Section 3.5 Purchase of Trust Student Loans; Reimbursement .............. 6
Section 3.6 Primary Servicing Fee; Carryover Servicing Fee .............. 9
Section 3.7 Access to Certain Documentation and Information
Regarding Trust Student Loans ............................... 9
Section 3.8 Servicer Expenses ........................................... 9
Section 3.9 Appointment of Subservicer .................................. 9
Section 3.10 Reports ..................................................... 10
Section 3.11 Covenants and Agreements of the Issuer, Administrator,
Trustee and Servicer ........................................ 1
Section 3.12 Special Programs ............................................ 2
Section 3.13 Financial Statements ........................................ 2
Section 3.14 Insurance ................................................... 2
Section 3.15 Administration Agreement .................................... 2
Section 3.16 Lender Identification Number ................................ 2
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ARTICLE IV
Section 4.1 Representations of Servicer ........................................ 3
Section 4.2 Indemnities of Servicer ............................................ 4
Section 4.3 Merger or Consolidation of, or Assumption of the
Obligations of, Servicer ........................................... 5
Section 4.4 Limitation on Liability of Servicer ................................ 5
Section 4.5 Xxxxxx Xxx Servicing L.P. Not to Resign as Servicer ................ 6
ARTICLE V
Section 5.1 Servicer Default ................................................... 6
Section 5.2 Appointment of Successor ........................................... 17
Section 5.3 Notification to Noteholders ........................................ 18
Section 5.4 Waiver of Past Defaults ............................................ 18
ARTICLE VI
Section 6.1 Amendment .......................................................... 19
Section 6.2 Notices ............................................................ 20
Section 6.3 Counterparts ....................................................... 20
Section 6.4 Entire Agreement; Severability ..................................... 1
Section 6.5 Governing Law ...................................................... 1
Section 6.6 Relationship of Parties ............................................ 1
Section 6.7 Captions ........................................................... 1
Section 6.8 Nonliability of Directors, Officers and Employees of Servicer,
the Trustee, the Indenture Trustee and the Administrator ........... 1
Section 6.9 Assignment ......................................................... 1
Section 6.10 Limitation of Liability of Trustee and Indenture Trustee ........... 1
Attachment A Schedule of Fees
Attachment B Servicer Locations
Attachment C Reports
Appendix
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SERVICING AGREEMENT
Xxxxxx Mae Servicing L.P. ("Servicer"), a Delaware limited partnership,
hereby agrees with (i) SLM Private Credit Student Loan Trust 200___-__ (the
"Issuer"), (ii) Chase Manhattan Bank USA, National Association, not in its
individual capacity but in its capacity as trustee under a trust agreement dated
__________ __, 200__ between SLM Education Credit Funding LLC (the "Depositor")
and Chase Manhattan Bank USA, National Association , as trustee [and Eligible
Lender Trustee] (the "Trustee"), (iii) Xxxxxx Xxx, Inc., a Delaware corporation
(the "Administrator") and (iv) JPMorgan Chase Bank , a New York banking
corporation, not in its individual capacity but in its capacity as Indenture
Trustee under an Indenture dated __________ __, 200__ among SLM Private Credit
Student Loan Trust 200___-__, the Trustee and JPMorgan Chase Bank (the
"Indenture Trustee"), as follows:
WHEREAS, the Trustee will acquire certain education loans to be held in
the Trust formed pursuant to a trust agreement (the "Trust Agreement"), dated as
of __________ __, 200__, between the Depositor and the Trustee;
WHEREAS, the Issuer will issue (i) notes (the "Notes") pursuant to an
indenture (the "Indenture"), dated as of __________ __, 2002, between the Issuer
and the Indenture Trustee, and (ii) certificates (the "Certificates") pursuant
to the Trust Agreement, which Notes and Certificates are payable from the assets
of the Issuer;
WHEREAS, the Issuer, the Administrator and the Trustee desire the
Servicer to service said education loans held by the Trustee on behalf of the
Issuer, and Servicer is willing to service said education loans for the Issuer,
the Administrator, the Trustee and the Indenture Trustee;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto agree as follows:
Article I
Section 1.1 Definitions and Usage. Except as otherwise specified herein or as
the context may otherwise require, capitalized terms used but not otherwise
defined herein are defined in Appendix A hereto, which also contains rules as to
usage that shall be applicable herein.
Article II
Section 2.1 Custody of Trust Student Loan Files. To assure uniform quality in
servicing the Trust Student Loans and to reduce administrative costs, the Issuer
hereby revocably appoints the Servicer, and the Servicer hereby accepts such
appointment, to act for the benefit of the Issuer, the Trustee and the Indenture
Trustee as custodian of the following documents or instruments (collectively the
"Trust
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Student Loan Files") which are hereby constructively delivered to the Indenture
Trustee, as pledgee of the Issuer with respect to each Trust Student Loan:
(a) the original fully executed copy of the note evidencing the Trust
Student Loan (or where applicable, the electronic records evidencing
the same); and
(b) any and all other documents and computerized records that the Servicer
shall keep on file, in accordance with its customary procedures,
relating to such Trust Student Loan or any obligor with respect
thereto.
Section 2.2 Duties of Servicer as Custodian. The Servicer shall hold the Trust
Student Loan Files for the benefit of the Issuer, the Trustee and the Indenture
Trustee and maintain such accurate and complete accounts, records and computer
systems pertaining to each Trust Student Loan File as shall enable the Issuer to
comply with this Agreement. In performing its duties as custodian the Servicer
shall act with reasonable care, using that degree of skill and attention that
the Servicer exercises with respect to the student loan files relating to
comparable student loans that the Servicer services on behalf of SLM Education
Credit Management Corporation and shall ensure that it fully complies with all
applicable Federal and state laws, including, if applicable, the Higher
Education Act, with respect thereto. The Servicer shall take all actions
necessary with respect to the Trust Student Loan Files held by it under this
Agreement and of the related accounts, records and computer systems, in order to
enable the Issuer, the Trustee or the Indenture Trustee to verify the accuracy
of the Servicer's record keeping with respect to the Servicer's obligations as
custodian hereunder. The Servicer shall promptly report to the Issuer, the
Administrator, the Trustee and the Indenture Trustee any material failure on its
part to hold the Trust Student Loan Files and maintain its accounts, records and
computer systems as herein provided and promptly take appropriate action to
remedy any such failure. Nothing herein shall be deemed to require an initial
review or any periodic review by the Issuer, the Administrator, the Trustee or
the Indenture Trustee of the Trust Student Loan Files. If in the reasonable
judgment of the Trustee it is necessary to preserve the interests of the
Noteholders, the Certificateholders or the Trust in the Trust Student Loans or
at the request of the Administrator, the Servicer shall transfer physical
possession of the notes (or the electronic records evidencing the same)
evidencing the Trust Student Loans to the Trustee, the Indenture Trustee or any
other custodian for either of them designated by the Trustee.
Section 2.3 Maintenance of and Access to Records. The Servicer shall maintain
each Trust Student Loan File at one of its offices specified in Attachment B to
this Agreement or at such other office as shall be consented to by the Issuer,
the Trustee and the Indenture Trustee upon written notice to the Issuer, the
Trustee and the Indenture Trustee. Upon reasonable prior notice, the Servicer
shall make available to the Issuer, the Trustee and the Indenture Trustee or
their respective duly authorized representatives, attorneys or auditors a list
of locations of the Trust Student Loan Files and the related accounts, records
and computer systems maintained by the Servicer at such times during normal
business hours as the Issuer, the Trustee or the Indenture Trustee shall
instruct.
Section 2.4 Release of Documents. Upon written instruction from the Indenture
Trustee, the Servicer shall release any Trust Student Loan File to the Indenture
Trustee, the Indenture Trustee's agent, or the Indenture Trustee's designee, as
the case may be, at such place or places as the Indenture
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Trustee may reasonably designate, as soon as practicable after such notice. The
Indenture Trustee shall cooperate with the Servicer to provide the Servicer with
access to the Trust Student Loan Files in order for the Servicer to continue to
service the Trust Student Loans after the release of the Trust Student Loan
Files. In the event the Servicer is not provided access to the Trust Student
Loan Files, the Servicer shall not be deemed to have breached its obligations
pursuant to Section 3.1, 3.2, 3.3 or 3.4 if it is unable to perform such
obligations due to its inability to have access to the Trust Student Loans
Files. The Servicer shall not be liable for any losses with respect to the
servicing of such Trust Student Loans arising after the release of the related
Trust Student Loan Files to the extent the losses are attributable to the
Servicer's inability to have access to the related Trust Student Loan Files.
Section 2.5 Instructions; Authority To Act. The Servicer shall be deemed to have
received proper instructions with respect to the Trust Student Loan Files upon
its receipt of written instructions signed by a Responsible Officer of the
Indenture Trustee.
Section 2.6 [RESERVED].
Section 2.7 Effective Period and Termination. Xxxxxx Xxx Servicing L.P.'s
appointment as custodian shall become effective as of the Closing Date and shall
continue in full force and effect for so long as Xxxxxx Mae Servicing L.P. shall
remain the Servicer hereunder. If Xxxxxx Xxx Servicing L.P. or any successor
Servicer shall resign as Servicer in accordance with the provisions of this
Agreement or if all the rights and obligations of Xxxxxx Mae Servicing L.P. or
any such successor Servicer shall have been terminated under Section 5.1, the
appointment of Xxxxxx Xxx Servicing L.P. or such successor Servicer as custodian
shall be terminated simultaneously with the effectiveness of such resignation or
termination. On or prior to the effective date of any resignation or termination
of such appointment, the Servicer shall deliver the Trust Student Loan Files to
the successor Servicer, the Indenture Trustee or the Indenture Trustee's agent,
at the direction of the Indenture Trustee, at such place or places as the
Indenture Trustee may reasonably designate. In establishing an effective date
for the termination of the Servicer as custodian of the Trust Student Loan
Files, the parties shall provide for a reasonable period for the Servicer to
deliver the Trust Student Loan Files to its designated successor.
Article III
Section 3.1 Duties of Servicer. The Servicer, for the benefit of the Issuer (to
the extent provided herein), shall manage, service, administer and make
collections on the Trust Student Loans with reasonable care, using that degree
of skill and attention that the Servicer exercises with respect to comparable
student loans that it services on behalf of SLM Education Credit Management
Corporation from the Closing Date (or with respect to Trust Student Loans which
are sold to the Issuer following the Closing Date, such later date as the Trust
Student Loans are delivered to Servicer for servicing hereunder) until the Trust
Student Loans are paid in full.
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At any time that substantially all remaining Trust Student Loans are
repurchased by the Depositor from the Issuer pursuant to Section 6.1 of the
Administration Agreement, the Servicer agrees to execute, at the request of the
Depositor, a new servicing agreement which agreement shall include terms and
conditions substantially the same as the terms and conditions of this Agreement;
provided, however, the Servicer shall not be required to so execute a new
servicing agreement until it has received all Servicing Fees then due and
payable hereunder. Without limiting the generality of the foregoing or of any
other provision set forth in this Agreement and notwithstanding any other
provision to the contrary set forth herein, the Servicer shall manage, service,
administer and make collections with respect to the Trust Student Loans
(including collection of all Interest Subsidy Payments and Special Allowance
Payments payable in relation to any Trust Student Loan, if any, on behalf of the
Trustee) in accordance with, and otherwise comply with, all applicable Federal
and state laws and, with respect to any Trust Student Loans which are also FFELP
Loans, including all applicable rules, regulations and other requirements of the
Higher Education Act and the applicable Guarantee Agreement, the failure to
comply with which would adversely affect the eligibility of one or more of the
Trust Student Loans for Federal reinsurance or Interest Subsidy Payments or
Special Allowance Payments or one or more of the Trust Student Loans for receipt
of Guarantee Payments, and with respect to any Trust Student Loans which are
Private Credit Loans, all applicable rules, regulations and requirements of the
applicable Loan Program and Surety Bond..
The Servicer's duties shall include, but shall not be limited to,
collection and posting of all payments, responding to inquiries of borrowers on
the Trust Student Loans, monitoring borrowers' status, making required
disclosures to borrowers, performing due diligence with respect to borrower
delinquencies, sending payment coupons to borrowers and otherwise establishing
repayment terms, reporting tax information to borrowers, if applicable,
accounting for collections and furnishing monthly statements with respect
thereto to the Administrator.
The Servicer shall follow its customary standards, policies and procedures
in performing its duties as Servicer. Without limiting the generality of the
foregoing, the Servicer is authorized and empowered to execute and deliver, on
behalf of itself, the Issuer, the Trustee, the Indenture Trustee, the
Noteholders, the Certificateholders or any of them, instruments of satisfaction
or cancellation, or partial or full release or discharge, and all other
comparable instruments, with respect to such Trust Student Loans; provided,
however, that the Servicer agrees that it will not (a) permit any rescission or
cancellation of a Trust Student Loan except as ordered by a court of competent
jurisdiction or governmental authority or as otherwise consented to in writing
by the Trustee and the Indenture Trustee provided further, that the Servicer may
write off any delinquent Trust Student Loan if the remaining balance of the
borrower's account is less than $50 or (b) reschedule, revise, defer or
otherwise compromise with respect to payments due on any Trust Student Loan
except pursuant to any applicable interest only, deferral or forbearance periods
or otherwise in accordance with all applicable standards, guidelines and
requirements with respect to the servicing of Student Loans; provided further,
however, that the Servicer shall not agree to any reduction of yield with
respect to any Trust Student Loan (either by reducing borrower payments or
reducing principal balance) except as permitted in accordance with Section 3.12
or otherwise if, and to the extent, the Servicer or the Administrator reimburses
the Issuer in an amount sufficient to offset any such effective yield reduction
made by the Servicer consistent with such customary servicing procedures as it
follows
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with respect to comparable Student Loans which it services on behalf of SLM
Education Credit Management Corporation.
The Trustee on behalf of the Issuer hereby grants a power of attorney and
all necessary authorization to the Servicer to maintain any and all collection
procedures with respect to the Trust Student Loans, including filing, pursuing
and recovering claims with the Guarantors for Guarantee Payments and where
applicable, with the Department for Interest Benefit Payments and Special
Allowance Payments and taking any steps to enforce such Trust Student Loans such
as commencing a legal proceeding to enforce a Trust Student Loan in the names of
the Issuer, the Trustee, the Indenture Trustee, the Noteholders and the
Certificateholders.
The Trustee shall upon the written request of the Servicer furnish the
Servicer with any other powers of attorney and other documents reasonably
necessary or appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder.
Section 3.2 Collection of Trust Student Loan Payments.
A. The Servicer shall make reasonable efforts (including all efforts that
may be specified under the Higher Education Act or any Guarantee Agreement, if
applicable) to collect all payments called for under the terms and provisions of
the Trust Student Loans as and when the same shall become due and shall follow
such collection procedures as it follows with respect to comparable student
loans that it services on behalf of SLM Education Credit Management Corporation.
The Servicer shall allocate collections with respect to the Trust Student Loans
between principal and interest in accordance with Section 2.5 of the
Administration Agreement. The Servicer may in its discretion waive any late
payment charge or any other fees that may be collected in the ordinary course of
servicing a Trust Student Loan. The Servicer may, at its option, retain any late
payment charges which it collects.
B. The Servicer shall make reasonable efforts to claim, pursue and collect
all Guarantee Payments from the Guarantors pursuant to the Guarantee Agreements,
if applicable, with respect to any of the Trust Student Loans as and when the
same shall become due and payable, shall comply with all applicable laws and
agreements with respect to claiming, pursuing and collecting such payments and
shall follow such practices and procedures as it follows with respect to
comparable guarantee agreements and student loans that it services on behalf of
SLM Education Credit Management Corporation.
In connection therewith, the Servicer is hereby authorized and empowered to
convey to any Guarantor the note and the related Trust Student Loan File
representing any Trust Student Loan in connection with submitting a claim to
such Guarantor for a Guarantee Payment in accordance with the terms of the
applicable Guarantee Agreement. All amounts so collected by the Servicer shall
constitute Available Funds for the applicable Collection Period and shall be
deposited into the Collection Account or transferred to the Administrator in
accordance with Section 2.4 of the Administration Agreement. The Trustee shall,
upon the written request of the Servicer, furnish the Servicer with any power of
attorney and other documents necessary or appropriate to enable the Servicer to
convey such documents to any Guarantor and to make such claims.
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C. The Servicer on behalf of the Trustee shall, on behalf of the
Issuer, make reasonable efforts to claim, pursue and collect, if applicable, all
Interest Subsidy Payments and Special Allowance Payments from the Department
with respect to any of the Trust Student Loans as and when the same shall become
due and payable, shall comply with all applicable laws and agreements with
respect to claiming, pursuing and collecting such payments and shall follow such
practices and procedures as the Servicer follows with respect to comparable
student loans that it services on behalf of SLM Education Credit Management
Corporation.
All amounts so collected by the Servicer shall constitute Available
Funds for the applicable Collection Period and shall be deposited into the
Collection Account or transferred to the Administrator in accordance with
Section 2.4 of the Administration Agreement. In connection therewith, the
Servicer shall prepare and file with the Department on a timely basis all claims
forms and other documents and filings necessary or appropriate in connection
with the claiming of Interest Subsidy Payments and Special Allowance Payments on
behalf of the Trustee and shall otherwise assist the Trustee in pursuing and
collecting such Interest Subsidy Payments and Special Allowance Payments from
the Department. The Trustee shall upon the written request of the Servicer
furnish the Servicer with any power of attorney and other documents reasonably
necessary or appropriate to enable the Servicer to prepare and file such claims
forms and other documents and filings.
Section 3.3 Realization upon Trust Student Loans. For the benefit of the Issuer,
the Servicer shall use reasonable efforts consistent with its servicing
practices and procedures that it utilizes with respect to comparable student
loans that it services on behalf of SLM Education Credit Management Corporation
and including, if applicable, all efforts that may be specified under the Higher
Education Act or any Guarantee Agreement in its servicing of any delinquent
Trust Student Loans.
Section 3.4 No Impairment. The Servicer shall not impair the rights of the
Issuer, the Trustee, the Indenture Trustee, the Noteholders or the
Certificateholders in such Trust Student Loans.
Section 3.5 Purchase of Trust Student Loans; Reimbursement.
A. With respect to Trust Student Loans which are FFELP Loans, the
Servicer, the Administrator, the Trustee and the Indenture Trustee shall give
notice to the other parties promptly, in writing, upon the discovery of any
breach of the provisions of Section 3.1, 3.2, 3.3 or 3.4 which has a materially
adverse effect on the interest of the Issuer. In the event of such a material
breach which is not curable by reinstatement of the Guarantor's guarantee of
such Trust Student Loan, the Servicer shall purchase the affected Trust Student
Loan not later than 120 days following the earlier of the date of discovery of
such material breach and the date of receipt of the Guarantor reject transmittal
form with respect to such Trust Student Loan. In the event of a material breach
with respect to such Trust Student Loan which is curable by reinstatement of the
Guarantor's guarantee of such Trust Student Loan, unless the material breach
shall have been cured within 360 days following the earlier of the date of
discovery of such material breach and the date of receipt of the Guarantor
reject transmittal form with respect to such Trust Student Loan, the Servicer
shall purchase such Trust Student Loan not later than the sixtieth day following
the end of such 360-day period. The purchase price hereunder will be the unpaid
principal amount of such Trust Student Loan plus
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accrued interest (calculated using the applicable percentage that would have
been insured pursuant to Section 428(b)(1)(G) of the Higher Education Act) plus
an amount equal to all forfeited Interest Subsidy Payments and Special Allowance
Payments with respect to such Trust Student Loan. The Servicer shall remit the
purchase price to the Administrator as provided in Section 2.6 of the
Administration Agreement on the date of purchase of any Trust Student Loan
pursuant to this Section 3.5. In consideration of the purchase of any such Trust
Student Loan pursuant to this Section 3.5, the Servicer shall remit the Purchase
Amount in the manner specified in Section 2.6 of the Administration Agreement.
Any breach that relates to compliance with the requirements of the Higher
Education Act or of the applicable Guarantor but that does not affect such
Guarantor's obligation to guarantee payments of a Trust Student Loan will not be
considered to have a material adverse effect for purposes of this Section 3.5A.
B. In addition, if any breach of Section 3.1, 3.2, 3.3 or 3.4 by the
Servicer does not trigger such purchase obligation but does result in the
refusal by a Guarantor to guarantee all or a portion of the accrued interest (or
any obligation of the Issuer to repay such interest to a Guarantor), or the loss
(including any obligation of the Issuer to repay to the Department) of Interest
Subsidy Payments and Special Allowance Payments, with respect to any Trust
Student Loan affected by such breach, then the Servicer shall reimburse the
Issuer in an amount equal to the sum of all such non-guaranteed interest amounts
that would have been owed to the Issuer by the Guarantor but for such breach by
the Servicer and such forfeited Interest Subsidy Payments or Special Allowance
Payments by netting such sum against the Servicing Fee payable to the Servicer
for such period and remitting any additional amounts owed in the manner
specified in Section 2.6 of the Administration Agreement not later than (i) the
last day of the next Collection Period ending not less than 60 days from the
date of the Guarantor's refusal to guarantee all or a portion of accrued
interest or loss of Interest Subsidy Payments or Special Allowance Payments, or
(ii) in the case where the Servicer reasonably believes such amounts are likely
to be collected, not later than the last day of the next Collection Period
ending not less than 360 days from the date of the Guarantor's refusal to
guarantee all or a portion of accrued interest or loss of Interest Subsidy
Payments or Special Allowance Payments. At the time such payment is made, the
Servicer shall not be required to reimburse the Issuer for interest that is then
capitalized, however, such amounts shall be reimbursed if the borrower
subsequently defaults and such capitalized interest is not paid by the
Guarantor.
C. Anything in this Section 3.5 to the contrary notwithstanding, if as
of the last Business Day of any month the aggregate outstanding principal amount
of Trust Student Loans with respect to which claims have been filed with and
rejected by a Guarantor or with respect to which the Servicer determines that
claims cannot be filed pursuant to the Higher Education Act as a result of a
breach by the Servicer or the Seller, exceeds 1% of the Pool Balance, the
Servicer or the Seller, as appropriate, shall purchase, within 30 days of a
written request of the Trustee or Indenture Trustee, such affected Trust Student
Loans in an aggregate principal amount such that after such purchase the
aggregate principal amount of such affected Trust Student Loans is less than 1%
of the Pool Balance. The Trust Student Loans to be purchased by the Servicer or
the Seller pursuant to the preceding sentence shall be based on the date of
claim rejection (or date of notice referred to in the first sentence of this
Section 3.5) with the Trust Student Loans with the earliest such date to be
purchased first.
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D. In lieu of repurchasing affected Trust Student Loans pursuant to
this Section 3.5, the Servicer may, at its option, with the prior consent of the
Administrator, substitute Student Loans or arrange for the substitution of
Student Loans which are substantially similar as of the date of substitution on
an aggregate basis to the Trust Student Loans for which they are being
substituted with respect to the following characteristics:
(1) status (i.e., in-school, grace, deferment, forbearance or
repayment),
(2) program type (i.e., unsubsidized Xxxxxxxx, subsidized Xxxxxxxx,
Consolidation (pre-1993 vs. post-1993) PLUS, SLS, MedLoan,
LawLoan, MBALoan or Signature Loan)
(3) school type,
(4) total return,
(5) principal balance, and
(6) remaining term to maturity.
In addition, each substituted Student Loan shall comply, as of the date of
substitution, with the representations and warranties made by the Seller in the
Sale Agreement. In choosing Student Loans to be substituted pursuant to this
subsection D, the Servicer shall make a reasonable determination that the
Student Loans to be substituted will not have a material adverse effect on the
Noteholders.
In the event the Servicer elects to substitute Student Loans pursuant
to this Section 3.5 and the Administrator consents to such substitution, the
Servicer will remit to the Administrator the amount of any shortfall between the
Purchase Amount of the substituted Student Loans and the Purchase Amount of the
Trust Student Loans for which they are being substituted. The Servicer shall
also remit to the Administrator an amount equal to all non-guaranteed interest
amounts that would have been owed to the Issuer by the Guarantor but for the
breach of the Servicer and forfeited Interest Subsidy Payments and Special
Allowance Payments with respect to the Trust Student Loans, if applicable, in
the manner provided in Section 2.6 of the Administration Agreement.
E. The sole remedy of the Issuer, the Trustee, the Indenture Trustee
and the Noteholders with respect to a breach pursuant to Section 3.1, 3.2, 3.3
or 3.4 shall be to require the Servicer to purchase Trust Student Loans, to
reimburse the Issuer as provided above or to substitute Student Loans pursuant
to this Section.
F. The Trustee shall have no duty to conduct any affirmative
investigation as to the occurrence of any condition requiring the purchase of
any Trust Student Loan or the reimbursement for any interest penalty pursuant to
this Section 3.5.
G. The Servicer shall not be deemed to have breached its obligations
pursuant to Section 3.1, 3.2, 3.3 or 3.4 if it is rendered unable to perform
such obligations, in whole or in part, by a force outside the control of the
parties hereto (including acts of God, acts of war, fires, earthquakes,
hurricanes, floods and other disasters). The Servicer shall diligently perform
its duties under this Agreement as soon as practicable following the termination
of such interruption of business.
Section 3.6 Primary Servicing Fee; Carryover Servicing Fee. The Primary
Servicing Fee for each calendar month and any Carryover Servicing Fees payable
on any Distribution Date in arrears by the
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Issuer shall be equal to the amounts determined by reference to the schedule of
fees attached hereto as Attachment A. Notwithstanding anything to the contrary
contained herein or in any other Basic Document, the Servicer shall be entitled
to receive any Carryover Servicing Fee on any Distribution Date only if and to
the extent that sufficient funds are available pursuant to Section 2.7.C of the
Administration Agreement.
Section 3.7 Access to Certain Documentation and Information Regarding Trust
Student Loans. Upon reasonable prior notice, the Servicer shall provide to the
Administrator and its agents access to the Trust Student Loan Files and shall
permit the Administrator to examine and make copies of, and abstracts from, the
records and books of account of the Servicer relating to the Trust Student Loans
and shall permit the Administrator to undertake periodic site reviews of the
Servicer's operations relating to the servicing of the Trust Student Loans
(including on the premises of any agent of the Servicer). Reasonable access
shall be afforded to the Administrator without charge, but only upon reasonable
request and during the normal business hours at the respective offices of the
Servicer. Nothing in this Section shall affect the obligation of the Servicer to
observe any applicable law prohibiting disclosure of information regarding the
Obligors and the failure of the Servicer to provide access to information as a
result of such obligation shall not constitute a breach of this Section.
Section 3.8 Servicer Expenses. The Servicer shall be required to pay all
expenses incurred by it in connection with its activities hereunder, including
fees and disbursements of independent accountants, taxes imposed on the Servicer
and expenses incurred in connection with distributions and reports to the
Administrator; provided, however, that the Carryover Servicing Fee will be
subject to increase agreed to by the Administrator, the Trustee and the Servicer
to the extent that a demonstrable and significant increase occurs in the costs
incurred by the Servicer in providing the services to be provided hereunder,
whether due to changes in applicable governmental regulations, program
requirements or regulations or postal rates. Notwithstanding anything to the
contrary contained herein, the Servicer may, at its option, collect fees from
the Borrowers in connection with sending payment histories and amortization
schedules to Borrowers, faxing documents to Borrowers, providing credit
reference letters to Borrowers, providing a "speed pay" payment option to
Borrowers and for other similar optional services requested by a Borrower and
may retain such fees. The Servicer may also, at its option, collect fees from
Borrowers for returned check processing or other insufficient fund transactions
and may assess such fees from the Borrower's Trust Student Loan payment and
retain such fees.
Section 3.9 Appointment of Subservicer. The Servicer may at any time, upon the
written consent of the Administrator, appoint a subservicer to perform all or
any portion of its obligations as Servicer hereunder; provided, however, that
the Servicer shall remain obligated and be liable to the Issuer, the Trustee,
the Indenture Trustee, the Noteholders and the Certificateholders for the
servicing and administering of the Trust Student Loans in accordance with the
provisions hereof without diminution of such obligation and liability by virtue
of the appointment of such subservicer and to the same extent and under the same
terms and conditions as if the Servicer alone were servicing and administering
the Trust Student Loans. The fees and expenses of the subservicer shall be as
agreed between the Servicer and its subservicer from time to time and none of
the Issuer, the Trustee, the Indenture Trustee, the Noteholders or the
Certificateholders shall have any responsibility therefor.
9
With respect to satisfying the Rating Agency Condition referred to above, the
term "subservicer" shall be deemed not to include systems providers, systems
developers or systems maintenance contractors, collection agencies, credit
bureaus, lock box providers, mail service providers and other similar types of
service providers.
Section 3.10 Reports. With respect to Trust Student Loans, the Servicer shall
prepare reports and data and furnish the following information to the Issuer,
the Administrator, the Trustee and the Indenture Trustee, unless otherwise
noted, at the specified times:
(a) The reports and data listed in Attachment C, at the times indicated in
the attachment;
(b) With respect to FFELP Loans, 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 Trustee or the Indenture Trustee, as the case may be,
shall have reasonable grounds to believe that such request would be
necessary in connection with its performance of its duties under
related documents, and within five (5) business days of receipt of a
request therefor, the Servicer shall furnish to the Trustee or to the
Indenture Trustee a list of all Trust Student Loans (by borrower
social security number, type and outstanding principal balance) and
any additional information requested relating to the Trust Student
Loans; and
(e) From time to time as may be reasonably requested, reports and data
providing additional information on the Trust Student Loans.
Section 3.11 Covenants and Agreements of the Issuer, Administrator, Trustee and
Servicer. The Issuer, the Administrator, the Servicer and the Trustee each agree
that:
A. Any payment and any communications received at any time by the Issuer,
Administrator, the Indenture Trustee and the Trustee with respect to a Trust
Student Loan shall be immediately transmitted to the Servicer. Such
communications shall include, but not be limited to, requests or notices of loan
cancellation, notices of borrower disqualification, letters, changes in address
or status, notices of death or disability, notices of bankruptcy and forms
requesting deferment of repayment or forbearance.
B. The Servicer may change any part or all of its equipment, data
processing programs and any procedures and forms in connection with the services
performed hereunder so long as Servicer continues to service the Trust Student
Loans in conformance with the requirements herein. The Servicer shall not make
any material change in its servicing system and operations with respect to the
Trust Student Loans without the prior written consent of the Administrator which
consent will not be unreasonably withheld. Each written request for consent by
the Servicer shall be acted upon
10
promptly by the Administrator. Anything in this paragraph B. to the contrary
notwithstanding, the Servicer will not be required to request the consent of the
Administrator with respect to any changes in the Servicer's servicing system and
operations which the Servicer reasonably determines are required due to changes
in the Higher Education Act or Guarantor program requirements.
C. The Trustee will furnish Servicer with a copy of any and all Guarantee
Agreements relating to the Trust Student Loans serviced hereunder.
D. The Servicer may and, at the direction of the Administrator, shall
include marketing or informational material generally provided to borrowers of
loans owned by SLM Education Credit Management Corporation with communications
sent to a borrower.
E. The Servicer may, in its discretion, if requested by a borrower of a
Trust Student Loan, arrange for the sale of such Trust Student Loan to another
lender which holds another student loan of such borrower at a price not less
than the Purchase Amount.
F. With respect to Trust Student Loans which are FFELP Loans, the Servicer
shall arrange for the sale of a Trust Student Loan to SLM Education Credit
Management Corporation upon receipt of notice from SLM Education Credit
Management Corporation that it has received an executed consolidation loan
application from the borrower of such Trust Student Loan. The sale price for
such Trust Student Loan shall equal the Purchase Amount.
Section 3.12 Special Programs. The Servicer shall offer borrowers of the Trust
Student Loans all special programs (e.g., Great Returnssm and Direct Repaysm),
whether or not in existence as of the date of this Agreement, generally offered
to the obligors of comparable loans owned by SLM Education Credit Management
Corporation and serviced by the Servicer; provided, however, to the extent any
such program is not required by the Higher Education Act and effectively reduces
borrower interest rate or principal balances on the Trust Student Loans, such
special program shall be applied to the Trust Student Loans only if and to the
extent the Issuer receives payment from SLM Education Credit Management
Corporation (and the Servicer receives notice of such payment) in an amount
sufficient to offset such effective yield reductions. SLM Education Credit
Management Corporation shall be deemed to be a third party beneficiary of this
Section 3.12 and shall make appropriate arrangements to compensate the Servicer
for increased costs associated with material changes to existing special
programs or the implementation and support of any new special programs.
Section 3.13 Financial Statements. The Servicer shall provide to the
Administrator at any time that the Servicer is not an Affiliate of the
Administrator (a) as soon as possible and in no event more than 120 days after
the end of each fiscal year of the Servicer audited financials as at the end of
and for such year and (b) as soon as possible and in no event more than 30 days
after the end of each quarterly accounting period of the Servicer unaudited
financials as at the end of and for such period.
Section 3.14 Insurance. The Servicer shall maintain or cause to be maintained
insurance with respect to its property and business against such casualties and
contingencies and of such types and in such amounts as is customary in the case
of institutions of the same type and size.
11
Section 3.15 Administration Agreement. The Servicer agrees to perform all duties
required of the Servicer under the Administration Agreement using that degree of
skill and attention that the Servicer exercises with respect to its comparable
business activities.
Section 3.16 Lender Identification Number. With respect to Trust Student Loans
which are FFELP Loans, the Trustee may permit trusts, other than the Issuer,
established by the Seller to securitize student loans, to use the Department
lender identification number applicable to the Issuer if the servicing
agreements with respect to such other trusts include provisions substantially
similar to this paragraph. In such event, the Servicer may claim and collect
Interest Subsidy Payments and Special Allowance Payments with respect to Trust
Student Loans and student loans in such other trusts using such common lender
identification number. Notwithstanding anything herein or in the Basic Documents
to the contrary, any amounts assessed against payments (including, but not
limited to, Interest Subsidy Payments and Special Allowance Payments) due from
the Department to any such other trust using such common lender identification
number as a result of amounts owing to the Department from the Issuer will be
deemed for all purposes hereof and of the Basic Documents (including for
purposes of determining amounts paid by the Department with respect to the
student loans in the Trust and such other trust) to have been assessed against
the Issuer and shall be deducted by the Administrator or the Servicer and paid
to such other trust from any collections made by them which would otherwise have
been payable to the Collection Account for the Issuer. Any amounts assessed
against payments due from the Department to the Issuer as a result of amounts
owing to the Department from such other trust using such common lender
identification number will be deemed to have been assessed against such other
trust and will be deducted by the Administrator or the Servicer from any
collections made by them which would otherwise be payable to the collection
account for such other trust and paid to the Issuer.
12
Article IV
Section 4.1 Representations of Servicer. The Servicer makes the following
representations on which the Issuer is deemed to have relied in acquiring
(through the Trustee) the Trust Student Loans and appointing the Servicer as
servicer hereunder. The representations speak as of the execution and delivery
of this Agreement and as of the Closing Date, but shall survive the sale,
transfer and assignment of the Trust Student Loans to the Trustee on behalf of
the Issuer and the pledge thereof to the Indenture Trustee pursuant to the
Indenture.
A. Organization and Good Standing. The Servicer is duly organized and
validly existing as a limited partnership formed under the laws of the State of
Delaware and in good standing under the laws of the State of Delaware, with the
power and authority to own its properties and to conduct its business as such
properties are currently owned and such business is presently conducted, and had
at all relevant times, and has, the power, authority and legal right to service
the Trust Student Loans and to hold the Trust Student Loan Files as custodian.
B. Due Qualification. The Servicer is duly qualified to do business and has
obtained all necessary licenses and approvals in all jurisdictions in which the
ownership or lease of property or the conduct of its business (including the
servicing of the Trust Student Loans as required by this Agreement) shall
require such qualifications.
C. Power and Authority. The Servicer has the power and authority to execute
and deliver this Agreement and to carry out its terms; and the execution,
delivery and performance of this Agreement have been duly authorized by the
Servicer by all necessary action. No registration with or approval of any
governmental agency is required for the due execution and delivery by, and
enforceability against, the Servicer of this Agreement.
D. Binding Obligation. This Agreement constitutes a legal, valid and
binding obligation of the Servicer enforceable in accordance with its terms
subject to bankruptcy, insolvency and other similar laws affecting creditors'
rights generally and subject to equitable principles.
E. No Violation. The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof will not conflict with, result
in any breach of any of the terms and provisions of, nor constitute (with or
without notice or lapse of time or both) a default under, the limited
partnership agreement of the Servicer, or any indenture, agreement or other
instrument to which the Servicer is a party or by which it shall be bound; nor
result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement or other instrument
(other than this Agreement and the other Basic Documents); nor violate any law
or, to the best of the Servicer's knowledge, any order, rule or regulation
applicable to the Servicer of any court or of any Federal or state regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Servicer or its properties.
F. No Proceedings. There are no proceedings or investigations pending, or,
to the Servicer's best knowledge, threatened, before any court, regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Servicer or its properties:
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(i) asserting the invalidity of this Agreement or any of the other
Basic Documents to which the Servicer is a party,
(ii) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or any of the other Basic Documents to
which the Servicer is a party,
(iii) seeking any determination or ruling that could reasonably be
expected to have a material and adverse effect on the performance by
the Servicer of its obligations under, or the validity or
enforceability of, this Agreement or any of the other Basic Documents
to which the Servicer is a party, or
(iv) relating to the Servicer and which might adversely affect the
Federal or state income tax attributes of the Notes.
Section 4.2 Indemnities of Servicer. The Servicer shall be liable in accordance
herewith only to the extent of the obligations specifically undertaken by the
Servicer under this Agreement.
The Servicer shall pay for any loss, liability or expense, including
reasonable attorneys' fees, that may be imposed on, incurred by or asserted
against the Issuer or the Trustee by the Department pursuant to the Higher
Education Act, to the extent that such loss, liability or expense arose out of,
or was imposed upon the Issuer through, the negligence, willful misfeasance or
bad faith of the Servicer in the performance of its obligations and duties under
this Agreement or by reason of the reckless disregard of its obligations and
duties under this Agreement, where the final determination that any such loss,
liability or expense arose out of, or was imposed upon the Issuer or the Trustee
through, any such negligence, willful misfeasance, bad faith or recklessness on
the part of the Servicer is established by a court of law, by an arbitrator or
by way of settlement agreed to by the Servicer. Notwithstanding the foregoing,
if the Servicer is rendered unable, in whole or in part, by a force outside the
control of the parties hereto (including acts of God, acts of war, fires,
earthquakes, hurricanes, floods and other disasters) to satisfy its obligations
under this Agreement, the Servicer shall not be deemed to have breached any such
obligation upon delivery of written notice of such event to the other parties
hereto, for so long as the Servicer remains unable to perform such obligation as
a result of such event.
For purposes of this Section, in the event of the termination of the rights
and obligations of Xxxxxx Xxx Servicing L.P. (or any successor thereto pursuant
to Section 4.3) as Servicer pursuant to Section 5.1, or a resignation by such
Servicer pursuant to this Agreement, such Servicer shall be deemed to be the
Servicer pending appointment of a successor Servicer pursuant to Section 5.2.
Liability of the Servicer under this Section shall survive the resignation
or removal of the Trustee or the Indenture Trustee or the termination of this
Agreement. If the Servicer shall have made any payments pursuant to this Section
and the Person to or on behalf of whom such payments are made thereafter
collects any of such amounts from others, such Person shall promptly repay such
amounts to the Servicer, without interest.
Section 4.3 Merger or Consolidation of, or Assumption of the Obligations of,
Servicer. The Servicer hereby agrees that, upon (a) any merger or consolidation
of the Servicer into another Person, (b) any merger or consolidation to which
the Servicer shall be a party resulting in the creation of
14
another Person or (c) any Person succeeding to the properties and assets of the
Servicer substantially as a whole, the Servicer shall:
(i) cause such Person (if other than the Servicer) to execute an
agreement of assumption to perform every obligation of the Servicer
hereunder,
(ii) deliver to the Trustee and Indenture Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such
consolidation, merger or succession and such agreement of assumption
comply with this Section and that all conditions precedent provided
for in this Agreement relating to such transaction have been complied
with,
(iii) cause the Rating Agency Condition to have been satisfied with
respect to such transaction, and
(iv) cure any existing Servicer Default or any continuing event which,
after notice or lapse of time or both, would become a Servicer
Default.
Upon compliance with the foregoing requirements, such Person shall be the
successor to the Servicer under this Agreement without further act on the part
of any of the parties to this Agreement.
Section 4.4 Limitation on Liability of Servicer. The Servicer shall not be under
any liability to the Issuer, the Noteholders, the Certificateholders, the
Administrator, the Trustee or the Indenture Trustee except as provided under
this Agreement, for any action taken or for refraining from the taking of any
action pursuant to this Agreement, for errors in judgment, for any incorrect or
incomplete information provided by schools, borrowers, Guarantors and the
Department, for the failure of any party to this Servicing Agreement or any
other Basic Document to comply with its respective obligations hereunder or
under any other Basic Document or for any losses attributable to the insolvency
of any Guarantor; provided, however, that this provision shall not protect the
Servicer against its obligation to purchase Student Loans from the Trust
pursuant to Section 3.5 hereof or to pay to the Trust amounts required pursuant
to Section 3.5 hereof or against any liability that would otherwise be imposed
by reason of willful misfeasance, bad faith or negligence in the performance of
duties or by reason of reckless disregard of obligations and duties under this
Agreement. The Servicer may rely in good faith on any document of any kind prima
facie properly executed and submitted by any person respecting any matters
arising under this Agreement.
Except as provided in this Agreement, the Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action where it is not
named as a party; provided, however, that the Servicer may undertake any
reasonable action that it may deem necessary or desirable in respect of this
Agreement and the other Basic Documents and the rights and duties of the parties
to this Agreement and the other Basic Documents and the interests of the
Noteholders and the Certificateholders. To the extent that the Servicer is
required to appear in or is made a defendant in any legal action or other
proceeding relating to the servicing of the Trust Student Loans, the Issuer
shall indemnify and hold the Servicer harmless from all cost, liability or
expense of the Servicer not arising out of or relating to the failure of the
Servicer to comply with the terms of this Agreement.
Section 4.5 Xxxxxx Xxx Servicing L.P. Not To Resign as Servicer. Subject to the
provisions of Section 4.3, Xxxxxx Mae Servicing L.P. shall not resign from the
obligations and duties hereby
15
imposed on it as Servicer under this Agreement except upon determination that
the performance of its duties under this Agreement are no longer permissible
under applicable law. Notice of any such determination permitting the
resignation of Xxxxxx Xxx Servicing L.P. shall be communicated to the Trustee
and the Indenture Trustee at the earliest practicable time (and, if such
communication is not in writing, shall be confirmed in writing at the earliest
practicable time) and any such determination shall be evidenced by an Opinion of
Counsel to such effect delivered to the Trustee and the Indenture Trustee
concurrently with or promptly after such notice. No such resignation shall
become effective until the Indenture Trustee or a successor Servicer shall have
assumed the responsibilities and obligations of Xxxxxx Mae Servicing L.P. in
accordance with Section 5.2.
Article V
Section 5.1 Servicer Default. If any one of the following events (a "Servicer
Default") shall occur and be continuing:
(1) any failure by the Servicer (i) to deliver to the Indenture Trustee
for deposit in the Trust Accounts any payment required by the Basic
Documents to which the Servicer is a signatory or (ii) in the event
that daily deposits into the Collection Account are not required, to
deliver to the Administrator any payment required by the Basic
Documents, which failure in case of either clause (i) or (ii)
continues unremedied for five Business Days after written notice of
such failure is received by the Servicer from the Trustee, the
Indenture Trustee or the Administrator or five Business Days after
discovery of such failure by an officer of the Servicer; or
(2) any failure by the Servicer duly to observe or to perform in any
material respect any other covenant or agreement of the Servicer set
forth in this Agreement or any other Basic Document to which the
Servicer is a signatory, which failure shall (i) materially and
adversely affect the rights of Noteholders and (ii) continues
unremedied for a period of 60 days after the date on which written
notice of such failure, requiring the same to be remedied, shall have
been given (A) to the Servicer by the Indenture Trustee, the Trustee
or the Administrator or (B) to the Servicer, and to the Indenture
Trustee and the Trustee by the Noteholders representing not less than
25% of the Outstanding Amount of the Notes provided, however, any
breach of Sections 3.1, 3.2, 3.3 or 3.4 shall not be deemed a Servicer
Default so long as the Servicer is in compliance with its repurchase
and reimbursement obligations under Section 3.5; or
(3) an Insolvency Event occurs with respect to the Servicer; or
(4) any failure by the Servicer to comply with any requirements under the
Higher Education Act resulting in a loss of its eligibility as a
third-party servicer;
then, and in each and every case, so long as the Servicer Default shall not have
been remedied, either the Indenture Trustee, or the Noteholders of Notes
evidencing not less than 25% of the Outstanding Amount of the Notes, by notice
then given in writing to the Servicer (and to the Indenture Trustee and the
Trustee if given by the Noteholders) may terminate all the rights and
obligations (other than
16
the obligations set forth in Section 3.5 and Section 4.2) of the Servicer under
this Agreement. As of the effective date of termination of the Servicer, all
authority and power of the Servicer under this Agreement, whether with respect
to the Notes, the Certificates or the Trust Student Loans or otherwise, shall,
without further action, pass to and be vested in the Indenture Trustee or such
successor Servicer as may be appointed under Section 5.2. The predecessor
Servicer shall cooperate with the successor Servicer, the Indenture Trustee and
the Trustee in effecting the termination of the responsibilities and rights of
the predecessor Servicer under this Agreement, including the transfer to the
successor Servicer for administration by it of all cash amounts that shall at
the time be held by the predecessor Servicer for deposit, or shall thereafter be
received by it with respect to a Trust Student Loan. All reasonable costs and
expenses (including attorneys' fees) incurred in connection with transferring
the Trust Student Loan Files to the successor Servicer and amending this
Agreement and any other Basic Documents to reflect such succession as Servicer
pursuant to this Section shall be paid by the predecessor Servicer (other than
the Indenture Trustee acting as the Servicer under this Section 5.1) upon
presentation of reasonable documentation of such costs and expenses. Upon
receipt of notice of the occurrence of a Servicer Default, the Trustee shall
give notice thereof to the Rating Agencies.
Section 5.2 Appointment of Successor.
A. Upon receipt by the Servicer of notice of termination pursuant to
Section 5.1, or the resignation by the Servicer in accordance with the terms of
this Agreement, the predecessor Servicer shall continue to perform its functions
as Servicer under this Agreement, in the case of termination, only until the
date specified in such termination notice or, if no such date is specified in a
notice of termination, until receipt of such notice and, in the case of
resignation, until the Indenture Trustee or a successor Servicer shall have
assumed the responsibilities and duties of Xxxxxx Xxx Servicing L.P. In the
event of the termination hereunder of the Servicer, the Issuer shall appoint a
successor Servicer acceptable to the Indenture Trustee, and the successor
Servicer shall accept its appointment by a written assumption in form acceptable
to the Indenture Trustee. In the event that a successor Servicer has not been
appointed at the time when the predecessor Servicer has ceased to act as
Servicer in accordance with this Section, the Indenture Trustee without further
action shall automatically be appointed the successor Servicer and the Indenture
Trustee shall be entitled to the Servicing Fee and any Carryover Servicing Fees.
Notwithstanding the above, the Indenture Trustee shall, if it shall be unwilling
or legally unable so to act, appoint or petition a court of competent
jurisdiction to appoint any established institution whose regular business shall
include the servicing of student loans, as the successor to the Servicer under
this Agreement; provided, however, that such right to appoint or to petition for
the appointment of any such successor Servicer shall in no event relieve the
Indenture Trustee from any obligations otherwise imposed on it under the Basic
Documents until such successor has in fact assumed such appointment.
B. Upon appointment, the successor Servicer (including the Indenture
Trustee acting as successor Servicer) shall be the successor in all respects to
the predecessor Servicer and shall be subject to all the responsibilities,
duties and liabilities placed on the predecessor Servicer that arise thereafter
or are related thereto and shall be entitled to an amount agreed to by such
successor Servicer (which shall not exceed the Servicing Fee unless the Rating
Agency Condition is satisfied
17
with respect to such compensation arrangements) and all the rights granted to
the predecessor Servicer by the terms and provisions of this Agreement.
C. The Servicer may not resign unless it is prohibited from serving as such
by law as evidenced by an Opinion of Counsel to such effect delivered to the
Indenture Trustee and the Trustee. Notwithstanding the foregoing or anything to
the contrary herein or in the other Basic Documents, the Indenture Trustee, to
the extent it is acting as successor Servicer pursuant hereto and thereto, shall
be entitled to resign to the extent a qualified successor Servicer has been
appointed and has assumed all the obligations of the Servicer in accordance with
the terms of this Agreement and the other Basic Documents.
Section 5.3 Notification to Noteholders, the Certificateholders and the
Rating Agencies. Upon any termination of, or appointment of a successor to, the
Servicer pursuant to this Article V, the Indenture Trustee shall give prompt
written notice thereof to Noteholders, the Certificateholders and the Rating
Agencies (which, in the case of any such appointment of a successor, shall
consist of prior written notice thereof to the Rating Agencies).
Section 5.4 Waiver of Past Defaults. The Noteholders of Notes evidencing a
majority of the Outstanding Amount of the Notes may, on behalf of all
Noteholders, waive in writing any default by the Servicer in the performance of
its obligations hereunder and any consequences thereof, except a default in
making any required deposits to or payments from any of the Trust Accounts (or
giving instructions regarding the same) in accordance with this Agreement. Upon
any such waiver of a past default, such default shall cease to exist, and any
Servicer Default arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement and the Administration Agreement. No such waiver
shall extend to any subsequent or other default or impair any right consequent
thereto.
Article VI
Section 6.1 Amendment.
A. This Agreement may be amended by the Servicer, the Issuer, the
Administrator, the Trustee and the Indenture Trustee, without the consent of any
of the Noteholders or Certificateholders, to comply with any change in any
applicable federal or state law, to cure any ambiguity, to correct or supplement
any provisions in this Agreement or for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions in this
Agreement; provided, however, that such action shall not, as evidenced by an
Opinion of Counsel delivered to the Trustee and the Indenture Trustee, adversely
affect in any material respect the interests of any Noteholder or any
Certificateholder.
B. This Agreement may also be amended from time to time by the Servicer,
the Issuer, the Administrator, the Trustee and the Indenture Trustee, with the
consent of the Noteholders of Notes evidencing a majority of the Outstanding
Amount of the Notes and the consent of the Certificateholders, for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Noteholders or the Certificateholders; provided, however, that no such amendment
shall (a) increase
18
or reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments with respect to Trust Student Loans or distributions
that shall be required to be made for the benefit of the Noteholders or the
Certificateholders or (b) reduce the aforesaid percentage of the Outstanding
Amount of the Notes, the Noteholders of which are required to consent to any
such amendment, without the consent of all outstanding Noteholders or (c) reduce
the aforesaid percentage of the Outstanding Amount of the Certificates, the
Certificateholders of which are required to consent to any such amendment,
without the consent of all outstanding Certificateholders.
It shall not be necessary for the consent of Noteholders pursuant to
paragraph B. to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the substance
thereof.
Promptly after the execution of any amendment to this Agreement (or, in the
case of the Rating Agencies, fifteen days prior thereto), the Trustee shall
furnish written notification of the substance of such amendment to the Indenture
Trustee and each of the Rating Agencies.
Prior to the execution of any amendment to this Agreement, the Trustee and
the Indenture Trustee shall be entitled to receive and rely upon an Opinion of
Counsel stating that the execution of such amendment is authorized or permitted
by this Agreement. The Indenture Trustee may, but shall not be obligated to,
execute and deliver such amendment which affects its rights, powers, duties or
immunities hereunder.
Section 6.2 Notices. All notices hereunder shall be given by United States
certified or registered mail, by telegram or by other telecommunication device
capable of creating written record of such notice and its receipt. Notices
hereunder shall be effective when received and shall be addressed to the
respective parties hereto at the addresses set forth below, or at such other
address as shall be designated by any party hereto in a written notice to each
other party pursuant to this section.
If to the Servicer, to:
Xxxxxx Xxx Servicing L.P.
00000 Xxxxxx Xxx Xxxxx, Xxxxxx, Xxxxxxxx 00000
Attn: Director of ABS Administration
If to the Issuer, to:
SLM Private Credit Student Loan Trust 200___-___
c/o Chase Manhattan Bank USA, National Association
Christiana Center/OPS4
000 Xxxxxxx Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
Attn: Corporate Trust Dept.
with a copy to:
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JPMorgan Chase Bank,
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Structured Finance Services
If to the Administrator, to:
Xxxxxx Xxx, Inc.
00000 Xxxxxx Xxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attn: Director, Corporate Finance Operations
If to the Trustee, to:
Chase Manhattan Bank USA, National Association
Christiana Center/OPS4
000 Xxxxxxx Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
Attn: Corporate Trust Dept.
with a copy to:
JPMorgan Chase Bank
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Structured Finance Services.
If to the Indenture Trustee, to:
JPMorgan Chase Bank
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: .
Section 6.3 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original, and such counterparts shall
constitute one (1) and the same instrument.
Section 6.4 Entire Agreement; Severability. This Agreement constitutes the
entire agreement between the Issuer, the Administrator, the Trustee, the
Indenture Trustee and Servicer. All prior
20
representations, statements, negotiations and undertakings with regard to the
subject matter hereof are superseded hereby.
If any term or provision of this Agreement or the application thereof to
any person or circumstance shall, to any extent, be invalid or unenforceable,
the remaining terms and provisions of this Agreement, or the application of such
terms or provisions to persons or circumstances other than those as to which it
is held invalid or unenforceable, shall not be affected thereby, and each term
and provision of this Agreement shall be valid and enforced to the fullest
extent permitted by law.
Section 6.5 Governing Law. The terms of this Agreement shall be subject to all
applicable provisions of the Higher Education Act and shall be construed in
accordance with and governed by the laws of the State of New York without
reference to its conflict of law provisions, and the obligations, rights and
remedies of the parties, hereunder shall be determined in accordance with such
laws.
Section 6.6 Relationship of Parties. The Servicer is an independent contractor
and, except for the services which it agrees to perform hereunder, the Servicer
does not hold itself out as an agent of any other party hereto. Nothing herein
contained shall create or imply an agency relationship among the Servicer and
any other party hereto, nor shall this Agreement be deemed to constitute a joint
venture or partnership between the parties.
Section 6.7 Captions. The captions used herein are for the convenience of
reference only and not part of this Agreement, and shall in no way be deemed to
define, limit, describe or modify the meanings of any provision of this
Agreement.
Section 6.8 Nonliability of Directors, Officers and Employees of Servicer, the
Trustee, the Indenture Trustee and the Administrator. No member of the board of
directors or any officer, manager, employee or agent of Servicer, the
Administrator, the Trustee or the Indenture Trustee (or any Affiliate of any
such party) shall be personally liable for any obligation incurred under this
Agreement.
Section 6.9 Assignment. This Agreement may not be assigned by the Servicer
except as permitted under Sections 4.3, 4.5 and 5.2 hereof. This Agreement may
not be assigned by the Administrator except as permitted under Sections 4.3 and
4.6 of the Administration Agreement.
Section 6.10 Limitation of Liability of Trustee and Indenture Trustee.
A. Notwithstanding anything contained herein to the contrary, this
Agreement has been signed by Chase Manhattan Bank USA, National Association, not
in its individual capacity but solely in its capacity as Trustee of the Issuer
and in no event shall Chase Manhattan Bank USA, National Association in its
individual capacity or, except as expressly provided in the Trust Agreement, as
Trustee have any liability for the representations, warranties, covenants,
agreements or other obligations of the Issuer or the Trustee hereunder or in any
of the certificates, notices or agreements delivered pursuant hereto as to all
of which recourse shall be had solely to the assets of the Issuer.
21
B. Notwithstanding anything contained herein to the contrary, this
Agreement has been signed by JPMorgan Chase Bank not in its individual capacity
but solely as Indenture Trustee and in no event shall JPMorgan Chase Bank have
any liability for the representations, warranties, covenants, agreements or
other obligations of the Issuer hereunder or in any of the certificates, notices
or agreements delivered pursuant hereto, as to all of which recourse shall be
had solely to the assets of the Issuer.
22
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on their behalf by their duly authorized officers as of
_________ __ ____, 200__.
XXXXXX XXX SERVICING L.P.
By: XXXXXX MAE, INC.
Its general partner
By: ___________________________
Name: ________________________
Title: ________________________
XXXXXX XXX, INC.,
as Administrator
By: ___________________________
Name: _________________________
Title: ________________________
SLM PRIVATE CREDIT STUDENT LOAN TRUST 200___-___
by Chase Manhattan Bank USA, National Association,
not in its individual capacity but solely as the Trustee
By: ___________________________
Name: _________________________
Title: ________________________
23
CHASE MANHATTAN BANK USA,
NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Trustee under a Trust Agreement,
dated ______________ ___, 200__,
between SLM Education Credit Funding LLC
and Chase Manhattan Bank USA, National Association
By: ___________________________
Name: _________________________
Title: ________________________
JPMORGAN CHASE BANK,
not in its individual capacity but solely as
Indenture Trustee under an Indenture,
dated ______________ ___, 200__ ,
among SLM Private Credit Student Loan
Trust 200___-___, Chase Manhattan Bank,
USA, National Association, not in its individual
capacity but solely as the Trustee and
JPMorgan Chase Bank
By: ___________________________
Name: _________________________
Title: ________________________
24
ATTACHMENT A
SCHEDULE OF FEES
The Servicer will receive a Primary Servicing Fee and a Carryover
Servicing Fee (together, the "Servicing Fee"). The "Primary Servicing Fee" for
any month is an amount equal to the sum of 1/12th of 0.___% of the outstanding
principal amount of the FFELP Trust Student Loans and 1/12th of 0.___% of the
outstanding principal amount of the Private Trust Student Loans as of the last
day of the preceding calendar month, plus any such amounts from prior Monthly
Servicing Payment Dates that remain unpaid.
The Primary Servicing Fee will be payable out of Available Funds and
amounts on deposit in the Reserve Account on the ____th day of each month (or,
if any such date is not a business day, on the next succeeding business day),
commencing ______________ ___, 200__ (each, a "Monthly Servicing Payment Date").
The "Carryover Servicing Fee" is the sum of (a) the amount of certain
increases in the costs incurred by the Servicer which are agreed to pursuant to
Section 3.8 of the Servicing Agreement, (b) any Conversion Fees, Transfer Fees
and Removal Fees (as defined below) incurred since the last Distribution Date
and (c) any amounts described in (a) and (b) above that remain unpaid from prior
Distribution Dates plus interest on such amounts for the period from the
Distribution Date on which such amounts become due to the date such amounts are
paid in full at a rate per annum for each Interest Period (as defined below)
equal to the sum of (a) the average accepted auction price (expressed on a bond
equivalent basis) for 91-day Treasury Bills sold at the most recent 91-day
Treasury Xxxx auction prior to the Interest Period as reported by the U.S.
Treasury Department and (b) 2.00%.
"Interest Period" shall mean the period from each Distribution Date
through the day before the next Distribution Date. The Carryover Servicing Fee
will be payable to the Servicer on each succeeding Distribution Date out of
Available Funds in the priority set forth in Section 2.8___ of the
Administration Agreement. On the ______________ ___, 200__ Monthly Servicing
Payment Date, the Servicer shall receive a pro rata portion of the Primary
Servicing Fee for the period from the Closing Date to and including
______________ ___, 200__.
Servicer will be paid a fee ("Conversion Fee") for any Student Loan
added to the Trust Estate which Student Loan is not serviced on the Servicer's
system unless such Student Loan is being substituted into the Trust Estate by
the Servicer pursuant to Section 3.5 of this Agreement. The Conversion Fee is
equal to the greater of $17.00 per account or the Servicer's verifiable costs
plus 15%.
Servicer will be paid a fee ("Transfer Fee") for any Student Loan
transferred in or out of the Trust Estate which is at the time of transfer being
serviced on the Servicer's system (regardless of the
1
owner) unless such Student Loans are being removed or added to the Trust in
order to comply with the Servicer's purchase/substitution obligation under
Section 3.5 of this Agreement. The Transfer Fee is equal to $4.00 per account
transaction.
Servicer will be paid a fee ("Removal Fee") for performing all activities
required to remove a Trust Student Loan from the Servicer's system to another
servicer unless such Trust Student Loan is being removed due to the termination
of the Servicer pursuant to Section 5.1 of this Agreement. The Removal Fee is
equal to $10.00 per account plus any verifiable direct expenses incurred for
shipping such Trust Student Loan to the new servicer.
2
ATTACHMENT B
Loan Servicing Center/Florida
X.X. Xxx 0000
Xxxxxx Xxxx, Xxxxxxx 00000-0000
(000) 000-0000
Loan Servicing Center/Indianapolis
00000 XXX Xxxxxxx
Xxxxxxx, Xxxxxxx 00000
(000) 000-0000
Loan Servicing Center/Pennsylvania
000 Xxxxxx Xxxxxx
Xxxxxxx Xxxxxxxxxx Xxxxxxx
Xxxxxx-Xxxxx, Xxxxxxxxxxxx 00000
(000) 000-0000
Loan Servicing Center/Texas
000 Xxxx Xxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
(000) 000-0000
Western Regional Center (Nevada)
00000 X. Xxxxxxxxxx Xxxx.
Xxx Xxxxx, Xxxxxx 00000
(000) 000-0000
ATTACHMENT C
REPORTS
1. CLASS Report 800 - Monthly activity summary report
2. CLASS Report 801 - Monthly average/ending balance report
3. CLASS Report 802 - Monthly activity detail
4. CLASS Report 803 - Monthly conversion/removal summary
5. CLASS Report 807 - Monthly delinquency aging report
6. CLASS Report 810 - Monthly characteristics summary
7. CLASS Report 866 - Monthly average/ending balance offset fee report
8. CLASS Report 882 - Great Rewards/Direct Repay Report
9. Monthly Cash Reconciliation Report
10. Quarterly ED799 billing (prepared from CLASS Reports 824, 825, 827, 828 and
829; supporting detail CLASS Reports 865, 868, 870 and 871; and the OE799
SAS library)
11. Portfolio Characteristics, Financial Activity, Quarterly calculation of
Accrued Interest to be capitalized, Delinquency Detail and Claims extracts.
