Exhibit 99.2
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SERVICING AGREEMENT
among
XXXXX FARGO STUDENT LOAN TRUST 2001-1
as Issuer,
XXXXX FARGO BANK SOUTH DAKOTA, NATIONAL ASSOCIATION
as Servicer,
XXXXX FARGO STUDENT LOANS RECEIVABLES I, LLC
as Depositor,
and
BANK ONE, NATIONAL ASSOCIATION
not in its individual capacity but solely
as Eligible Lender Trustee
Dated as of November [o], 2001
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TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Usage
ARTICLE II
Custody of Financed Student Loans
SECTION 2.01. Custody of Student Loan Files.............................................4
SECTION 2.02. Duties of Servicer as Custodian..........................................5
SECTION 2.03. Instructions; Authority To Act............................................5
SECTION 2.04. Custodian's Indemnification...............................................6
SECTION 2.05. Effective Period and Termination..........................................6
ARTICLE III
Administration and Servicing of Student Loans
SECTION 3.01. Duties of Servicer.......................................................6
SECTION 3.02. Collection of Student Loan Payments.......................................8
SECTION 3.03. Realization upon Student Loans............................................9
SECTION 3.04. No Impairment............................................................10
SECTION 3.05. Purchase of Student Loans; Reimbursement.................................10
SECTION 3.06. Servicing Fee............................................................10
SECTION 3.07. Servicer's Report........................................................11
SECTION 3.08. Annual Statement as to Compliance; Notice of Default.....................11
SECTION 3.09. Annual Independent Certified Public Accountants' Report..................12
SECTION 3.10. Access to Certain Documentation and Information Regarding
Financed Student Loans...................................................12
SECTION 3.11. Servicer Expenses........................................................12
SECTION 3.12. Appointment of Subservicers..............................................12
ARTICLE IV
Deposits into the Collection Account
SECTION 4.01. Deposits into the Collection Account.....................................13
ARTICLE V
The Servicer
SECTION 5.01. Representations of Servicer..............................................13
SECTION 5.02. Indemnities of Servicer..................................................15
SECTION 5.03. Merger or Consolidation of, or Assumption of the Obligations
of, Servicer.............................................................16
SECTION 5.04. Limitation on Liability of Servicer and Others..........................16
SECTION 5.05. Xxxxx Fargo Bank South Dakota, National Association Not to
Resign as Servicer.......................................................17
ARTICLE VI
Default
SECTION 6.01. Servicer Default.........................................................17
SECTION 6.02. Appointment of Successor.................................................18
SECTION 6.03. Notification to Noteholders..............................................19
SECTION 6.04. Waiver of Past Defaults..................................................19
ARTICLE VII
Termination
SECTION 7.01. Termination..............................................................20
ARTICLE VIII
Miscellaneous
SECTION 8.01. Amendment................................................................20
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SECTION 8.02. Protection of Interests in Trust.........................................21
SECTION 8.03. Notices..................................................................22
SECTION 8.04. Assignment...............................................................24
SECTION 8.05. Limitations on Rights of Others..........................................24
SECTION 8.06. Severability.............................................................25
SECTION 8.07. Separate Counterparts....................................................25
SECTION 8.08. Headings.................................................................25
SECTION 8.09. Governing Law............................................................25
SECTION 8.10. Non-Petition Covenants...................................................25
SECTION 8.11. Limitation of Liability of Eligible Lender Trustee and
Indenture Trustee........................................................26
SERVICING AGREEMENT dated as of November [o], 2001 among Xxxxx Fargo
Student Loan Trust 2001-1, a Delaware trust (the "Issuer"), Xxxxx Fargo Bank
South Dakota, National Association, as servicer (the "Servicer"), Xxxxx Fargo
Student Loans Receivables I, LLC, as depositor (the "Depositor"), and Bank
One, National Association ("Bank One"), a national banking association, solely
as eligible lender trustee and not in its individual capacity (the "Eligible
Lender Trustee").
WHEREAS, the Issuer desires to purchase from the Depositor (and, with
respect to legal title to the student loans, Bank One as trustee on behalf of
the Depositor) a portfolio of federally reinsured student loans purchased in
the ordinary course of business by the Depositor; and
WHEREAS, the Eligible Lender Trustee is willing to hold legal title
to, and serve as eligible lender trustee with respect to, such student loans
on behalf of the Issuer; and
WHEREAS, the Servicer is willing to service such student loans and
undertake certain administrative functions with respect thereto.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
Definitions and Usage
Capitalized terms used but not defined herein are defined in Appendix
A to the Administration Agreement, dated as of November [o], 2001, among the
Issuer, Xxxxx Fargo Bank Minnesota, National Association, as Administrator,
and Chase Manhattan Bank, as Indenture Trustee, which also contains rules as
to usage and construction that shall be applicable herein.
ARTICLE II
Custody of Financed Student Loans
SECTION 2.01 Custody of Student Loan Files. To assure uniform quality
in servicing the Financed Student Loans and to reduce administrative costs,
the Issuer hereby revocably appoints the Servicer, and the Servicer hereby
accepts such appointment, to act for the benefit of the Issuer and the
Indenture Trustee as Custodian of the following documents or instruments which
are hereby constructively delivered to the Indenture Trustee, as pledgee of
the Issuer (or will be constructively delivered to the Indenture Trustee, as
pledgee of the Issuer, in the case of Prefunded Loans and Serial Loans, as of
the applicable Transfer Date, in the case of Qualified Substitute Student
Loans, as of the date of the relevant Assignment to the Issuer, in the case of
Consolidation Loans originated during the Funding Period by the Eligible
Lender Trustee on behalf of the Issuer, as of the applicable date of
origination or in the case of Consolidation Loans the principal balances of
which are increased by the principal balances of any related Add-on
Consolidation Loans, as of the applicable Add-on Consolidation Loan Funding
Date) with respect to each Financed Student Loan:
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(a) the original fully executed copy of the note evidencing
the Financed Student Loan (including the original loan application
fully executed by the Borrower); 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 Financed Student Loan or any
Obligor with respect thereto.
SECTION 2.02. Duties of Servicer as Custodian.
(a) Safekeeping. The Servicer shall maintain custody of the Student
Loan Files for the benefit of the Issuer and the Indenture Trustee on behalf
of the Noteholders and any Swap Counterparties and maintain such accurate and
complete accounts, records and computer systems pertaining to each Student
Loan File as shall enable the Issuer to comply with the Basic Documents. 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 all comparable Student
Loans that the Servicer services and shall ensure that it complies with all
applicable federal and state laws, including the Higher Education Act, with
respect thereto. The Servicer shall conduct, or cause to be conducted,
periodic audits of the Student Loan Files held by it under this Agreement and
of the related accounts, records and computer systems, in such a manner as
shall enable the Issuer, the Indenture Trustee or any Swap Counterparties to
verify the accuracy of the Servicer's record keeping. The Servicer shall
promptly report to the Issuer, the Indenture Trustee and any Swap
Counterparties any failure on its part to hold the Student Loan Files and
maintain its accounts, records and computer systems as herein provided and
promptly take appropriate action to remedy any such failure. Nothing herein
shall be deemed to require an initial review or any periodic review by the
Issuer, the Eligible Lender Trustee or the Indenture Trustee of the Student
Loan Files.
(b) Maintenance of Records. The Servicer shall maintain each Student
Loan File at one of the locations specified in Schedule A to this Agreement or
at such other office as shall be specified by written notice to the Issuer,
the Indenture Trustee and any Swap Counterparties not later than 90 days after
any change in location. Upon reasonable prior notice of not less than three
Business Days, the Servicer shall make available to the Issuer, the Indenture
Trustee and any Swap Counterparties or their respective duly authorized
representatives, attorneys or auditors a list of locations of the Student Loan
Files and the related accounts, records and computer systems maintained by the
Servicer.
(c) Release of Documents. Upon instruction from the Indenture
Trustee, the Servicer shall, as soon as practicable, release any Student Loan
File to the Indenture Trustee, the Indenture Trustee's agent, or the Indenture
Trustee's designee, as the case may be, at such place or places as the
Indenture Trustee may designate.
SECTION 2.03. Instructions; Authority To Act. The Servicer shall be
deemed to have received proper instructions with respect to the Student Loan
Files upon its receipt of written instructions signed by a Responsible Officer
of the Indenture Trustee.
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SECTION 2.04. Custodian's Indemnification. The Servicer as Custodian
shall pay for any actual loss, liability or expense, including reasonable
attorneys' fees, that may be imposed on, incurred by or asserted against the
Issuer, the Eligible Lender Trustee or the Indenture Trustee or any of their
officers, directors, employees and agents as a result of any improper act or
omission in any way relating to the maintenance and custody by the Servicer as
Custodian of the Student Loan Files as required by this Agreement where the
final determination that any such improper act or omission by the Servicer
resulted in such loss, liability or expense is established by a court of law,
by an arbitrator, or by way of settlement agreed to by the Servicer; provided,
however, that the amount of any liability with respect to any Financed Student
Loan shall not exceed the amount that would have been paid if such Student
Loan had been accepted and paid by the related Guarantor as a claim, and
provided, further, that the Servicer shall not be liable to the Eligible
Lender Trustee for any portion of any such amount resulting from the willful
misfeasance, bad faith or negligence of the Eligible Lender Trustee and the
Servicer shall not be liable to the Indenture Trustee for any portion of any
such amount resulting from the willful misfeasance, bad faith or negligence of
the Indenture Trustee. This provision shall not be construed to limit the
Servicer's or any other party's rights, obligations, liabilities, claims or
defenses which arise as a matter of law or pursuant to any other provision of
this Agreement.
SECTION 2.05. Effective Period and Termination. The appointment of
Xxxxx Fargo Bank South Dakota, National Association as Custodian shall become
effective as of the Closing Date and shall continue in full force and effect
for so long as Xxxxx Fargo Bank South Dakota, National Association shall
remain the Servicer hereunder. If all the rights and obligations of Xxxxx
Fargo Bank South Dakota, National Association shall have been terminated under
Section 6.01, the appointment of Xxxxx Fargo Bank South Dakota, National
Association as Custodian shall be terminated simultaneously with the
effectiveness of such termination. As soon as practicable on or after any
termination of such appointment and in any event within ninety (90) days,
Xxxxx Fargo Bank South Dakota, National Association shall deliver possession
of the Student Loan Files to the Indenture Trustee or the Indenture Trustee's
agent at such place or places as the Indenture Trustee may reasonably
designate. Xxxxx Fargo Bank South Dakota, National Association will continue
to hold the Student Loan Files as agent of the Indenture Trustee until the
Student Loan Files are transferred.
ARTICLE III
Administration and Servicing of Student Loans
SECTION 3.01. Duties of Servicer. The Servicer, for the benefit of
the Issuer (to the extent provided herein), the Noteholders and any Swap
Counterparties, shall manage, service, administer and make collections on the
Financed Student Loans with reasonable care, using that degree of skill and
attention that the Servicer exercises with respect to all comparable Student
Loans that it services. 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 Financed Student
Loans (other than collection of any Interest Subsidy Payments and Special
Allowance Payments, which the Eligible Lender Trustee will perform on behalf
of the Trust) in accordance with, and otherwise comply with, all applicable
federal and state laws, including any applicable standards, guidelines and
requirements of the Higher Education Act and the applicable Guarantee
Agreement, the failure to comply with which would adversely affect the
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eligibility of one or more of the Financed Student Loans for federal
reinsurance or Interest Subsidy Payments, Special Allowance Payments or
Guarantee Payments or would have an adverse effect on the Noteholders or any
Swap Counterparties. The Servicer also hereby acknowledges that its obligation
to service the Financed Student Loans includes all Consolidation Loans
originated by the Issuer during the Funding Period, any Consolidation Loan
supplemented from time to time during and after the Funding Period by the
addition of the principal balance of any related Add-on Consolidation Loan,
any Qualified Substitute Student Loans conveyed to the Issuer pursuant to
Section 3.02 of the Loan Sale Agreement and those Prefunded Loans and Serial
Loans conveyed to the Eligible Lender Trustee on behalf of the Trust pursuant
to Section 2.02 of the Loan Sale Agreement and the related Transfer Agreement,
a copy of which shall be delivered to the Servicer by the Seller and the
Depositor promptly upon execution thereof; provided, however, that any failure
by the Seller and the Depositor to so deliver a Transfer Agreement shall not
affect the Servicer's obligations hereunder to service all the Financed
Student Loans.
The Servicer's duties shall include collection and posting of all
payments, responding to inquiries of borrowers on such Financed Student Loans,
monitoring borrowers' status, making required disclosures to borrowers,
investigating delinquencies, sending payment coupons to borrowers and
otherwise establishing repayment terms, reporting tax information to
borrowers, if applicable, accounting for collections and furnishing monthly
and annual statements with respect thereto to the Administrator. Subject to
the provisions of Section 3.02, the Servicer shall follow its customary
standards, policies and procedures in performing its duties as Servicer.
Without limiting the generality of the foregoing, the Servicer is authorized
and empowered to execute and deliver, on behalf of itself, the Issuer, the
Eligible Lender Trustee, the Indenture Trustee and the Noteholders or any of
them, instruments of satisfaction or cancellation, or partial or full release
or discharge, and all other comparable instruments, with respect to such
Financed Student Loans; provided, however, that the Servicer agrees that it
will not (a) permit any rescission or cancellation of a Financed Student Loan
except as ordered by a court of competent jurisdiction or governmental
authority or as otherwise consented to in writing by the Eligible Lender
Trustee and the Indenture Trustee or (b) reschedule, revise, defer or
otherwise compromise with respect to payments due on any Financed Student Loan
except pursuant to any applicable Deferral or Forbearance periods or otherwise
in accordance with all applicable standards, guidelines and requirements with
respect to the servicing of the Financed Student Loans; and provided, further,
that the Servicer shall not agree to any decrease of the interest rate on, or
the principal amount payable with respect to, any Financed Student Loan.
The Servicer, for the benefit of the Issuer (to the extent provided
herein) and the Indenture Trustee on behalf of the Noteholders, shall promptly
and routinely furnish the Eligible Lender Trustee and the Indenture Trustee
with copies of all material reports, records, and other documents and data as
required by this Agreement or as may otherwise be required by the Higher
Education Act. All material correspondence received by the Servicer relating
to individual Student Loans shall be maintained in microcopy form or in
summary form in an automated history file established by the Servicer. The
Servicer shall furnish in good condition all forms and supplies as specified
in this Agreement and any Schedules hereto. The Eligible Lender Trustee and
the Indenture Trustee may transmit Financed Student Loan account data to the
Servicer on these forms or by any other mutually acceptable means. In
performing its duties hereunder, the Servicer will be guided by and comply
with the Higher Education Act and
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applicable requirements of the related Guarantor. The Servicer agrees to
produce a clear and precise audit trail for each Financed Student Loan and to
comply with such other reporting, servicing, and operating standards as are
contained in this Agreement.
The Eligible Lender Trustee on behalf of the Issuer hereby grants a
power of attorney and all necessary authorization to the Servicer to maintain
any and all collection procedures with respect to the Financed Student Loans,
including filing, pursuing and recovering claims against the Guarantors for
Guarantee Payments and taking any steps to enforce such Financed Student Loans
such as commencing a legal proceeding to enforce a Financed Student Loan in
the name of the Issuer, the Eligible Lender Trustee, the Indenture Trustee or
the Noteholders. The Eligible Lender Trustee or the Indenture Trustee shall
upon the written request of the Servicer or the Administrator furnish the
Servicer or the Administrator with any other powers of attorney and other
documents reasonably necessary or appropriate to enable the Servicer or the
Administrator to carry out their servicing and administrative duties
hereunder.
SECTION 3.02. Collection of Student Loan Payments.
(a) The Servicer shall make reasonable efforts (including all efforts
that may be specified under the Higher Education Act or any Guarantee
Agreement) to collect all payments called for under the terms and provisions
of the Financed Student Loans as and when the same shall become due and shall
follow such collection procedures as it follows with respect to all comparable
Student Loans that it services. The Servicer shall allocate collections with
respect to the Financed Student Loans between principal and interest in
accordance with the terms of each such loan. 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 Financed Student Loan.
(b) The Servicer shall make reasonable efforts to claim, pursue and
collect all Guarantee Payments from the Guarantors pursuant to the Guarantee
Agreements with respect to any of the Financed Student Loans as and when the
same shall become due and payable, shall comply with the Higher Education Act
and all other 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 all comparable guarantee agreements
and student loans that it services. In connection therewith, the Servicer is
hereby authorized and empowered to convey to the related Guarantor the note
and the related Student Loan File representing any Financed Student Loan in
connection with submitting a claim to the applicable Guarantor for a Guarantee
Payment in accordance with the terms of the applicable Guarantee Agreement.
(c) The Eligible Lender Trustee shall, with the assistance of the
Servicer as set forth below and on behalf of the Issuer, make reasonable
efforts to claim, pursue and collect all Interest Subsidy Payments and Special
Allowance Payments from the Department with respect to any of the Financed
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 Student Loans serviced by it. All amounts so
collected by the Eligible Lender Trustee with respect to Financed Student
Loans (net, for the first Collection Period, of interest accrued prior to the
Cutoff Date that is not to be capitalized) shall constitute Monthly Available
Funds for the applicable Monthly Collection Period and Available Funds for the
applicable Collection
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Period, and shall be deposited into the Collection Account in accordance with
Section 4.01. In connection therewith, the Servicer shall prepare and file
with the Department on a timely basis all claims forms and other documents and
filings necessary or appropriate in connection with the claiming of Interest
Subsidy Payments and Special Allowance Payments on behalf of the Eligible
Lender Trustee and shall otherwise assist the Eligible Lender Trustee in
pursuing and collecting such Interest Subsidy Payments and Special Allowance
Payments from the Department. The Eligible Lender Trustee shall upon the
written request of the Servicer furnish the Servicer with any power of
attorney and other documents reasonably necessary or appropriate to enable the
Servicer to prepare and file such claims forms and other documents and
filings.
The Eligible Lender Trustee may permit trusts, other than the Trust,
established by the Depositor to securitize student loans to use the Department
lender identification number applicable to the Trust. In such event, the
Eligible Lender Trustee may claim and collect Interest Subsidy Payments and
Special Allowance Payments with respect to Financed Student Loans in the Trust
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 (including, but not limited to, Consolidation
Fees) owing to the Department from the Trust 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 Trust and shall be
deducted by the Eligible Lender Trustee 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 Trust. If so specified in the
servicing agreement applicable to any such other trust, any amounts assessed
against payments due from the Department to the Trust 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 Eligible Lender Trustee 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 Trust.
SECTION 3.03. Realization upon Student Loans. For the benefit of the
Issuer, the Servicer shall use reasonable efforts consistent with its
customary servicing practices and procedures and including all efforts that
may be specified under the Higher Education Act or the applicable Guarantee
Agreement in its servicing of any delinquent Financed Student Loans.
SECTION 3.04. No Impairment. The Servicer shall not impair the rights
of the Issuer, the Eligible Lender Trustee, the Indenture Trustee, the
Depositor, the Noteholders or any Swap Counterparties in the Financed Student
Loans.
SECTION 3.05. Purchase of Student Loans; Reimbursement.
(a) Upon the discovery by the Servicer, the Eligible Lender Trustee,
the Indenture Trustee or the Seller of any breach pursuant to Sections 3.01,
3.02, 3.03 or 3.04 hereof, the party discovering the breach shall give prompt
written notice to the others. If the breach is not cured
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within sixty (60) days after the Servicer becomes aware or receives written
notice (whichever is earlier) of such breach, the Servicer shall purchase or
arrange for the purchase of any Student Loan in which the interests of the
Noteholders, the Issuer, the Indenture Trustee, the Eligible Lender Trustee or
any Swap Counterparties are materially and adversely affected by such breach
as of the first day succeeding the end of such 60-day period that is the last
day of a Monthly Collection Period (it being understood that any such breach
that does not affect the related Guarantor's obligation to guarantee payment
of such Student Loan will not be considered to have a material adverse effect
for this purpose and it being further understood that any dispute as to
whether such Guarantor's obligation has been so affected so as to create such
a material adverse effect, shall be resolved, for so long as the Notes are
Outstanding, by the Indenture Trustee, whose determination shall be
dispositive, and after the Notes are no longer Outstanding, by the Eligible
Lender Trustee, whose determination shall then be dispositive); provided,
however, that during each 12-month period following the Cutoff Date or an
anniversary of the Cutoff Date (each, a "Servicer Liability Period"), the
Servicer will be obligated to purchase Student Loans only to the extent its
total liability incurred during the then current Servicer Liability Period for
such purchases and any other liabilities under this Agreement exceeds an
amount (the "Servicer Liability Limit") equal to 0.15% of the principal
balances of the Financed Student Loans outstanding as of the Cutoff Date or,
after the first anniversary of the Cutoff Date, as of the preceding July 31.
(b) In consideration of the purchase of any such Student Loan
pursuant to this Section 3.05, the Servicer shall remit, in the manner
specified in Section 4.01, the Purchase Amount and the Issuer shall execute
such assignments and other documents reasonably requested by the Servicer in
order to effect the transfer of such Student Loan to the Servicer or its
designee; provided, however, that the Servicer's total liability for losses
for rejected claims by the Guarantors for any Financed Student Loan based on
any breach pursuant to Sections 3.01, 3.02, 3.03 or 3.04 hereof will not
exceed that amount which the related Guarantor would have been obligated to
pay with respect to such loan had its obligation to guarantee payment thereof
not been affected by the Servicer's breach. Subject to Section 5.02, the
exclusive remedy of the Noteholders, the Issuer, the Indenture Trustee, and
the Eligible Lender Trustee and the entire liability of Servicer for such a
breach shall be limited to requiring the Servicer to purchase Financed Student
Loans pursuant to this Section 3.05.
SECTION 3.06. Servicing Fee. The Servicing Fee for each calendar
month (the "Servicing Fee") shall be equal to one-twelfth of [o]% or such
larger percentage approved by the Rating Agencies, not to exceed [o]% (or of
[o]% with respect to any calendar month beginning with [o]) of the aggregate
principal balances of the Financed Student Loans outstanding as of the last
day of the preceding calendar month calendar month.
The Servicing Fee (together with any portion of the Servicing Fee
that remains unpaid from prior Monthly Payment Dates) will be payable on each
Monthly Payment Date and will be paid solely out of Monthly Available Funds in
the case of each Monthly Payment Date that is not a Quarterly Payment Date
(and out of Available Funds in the case of each Quarterly Payment Date) and
amounts on deposit in the Reserve Account on such Monthly Payment Date
(including each Quarterly Payment Date) as provided in Sections 2(d)(iv)(A),
2(d)(v)(A) and 2(e)(iv)(A) of the Administration Agreement.
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SECTION 3.07. Servicer's Report. On or before the fifteenth day of
each month (or, if any such day is not a Business Day, on the next succeeding
Business Day), the Servicer shall deliver to the Administrator a servicer's
report with respect to the preceding calendar month containing all information
necessary for the Administrator to prepare the Administrator's Certificate,
referred to in Section 2(b)(ii) of the Administration Agreement, covering such
preceding calendar month.
SECTION 3.08. Annual Statement as to Compliance; Notice of Default.
(a) The Servicer shall deliver to the Depositor, the Eligible Lender
Trustee, the Indenture Trustee and any Swap Counterparties (with a copy to the
Seller), on or before April 30 of each year beginning [o], 2002, an Officers'
Certificate of the Servicer, dated as of [December 31 of the preceding year],
stating that (i) a review of the activities of the Servicer during the
preceding 12-month period (or, in the case of the first such certificate,
during the period from the Closing Date to [December 31, 2001] and of its
performance has been made under such officers' supervision and (ii) to the
best of such officers' knowledge, based on such review, the Servicer has
fulfilled all its obligations under this Agreement in all material respects
throughout such year (or in the case of the first such Officers' Certificate,
such shorter period) or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officers and the
nature and status thereof. The Indenture Trustee shall send a copy of each
such Officers' Certificate and each report referred to in this Section 3.08 to
the Rating Agencies. A copy of each such Officers' Certificate and each report
referred to in this Section 3.08 may be obtained by any Noteholder or Note
Owner by a request in writing to the Eligible Lender Trustee addressed to its
Corporate Trust Office, together with evidence satisfactory to the Eligible
Lender Trustee that such Person is one of the foregoing parties. Upon the
telephone request of the Eligible Lender Trustee, the Indenture Trustee will
promptly furnish the Eligible Lender Trustee a list of Noteholders as of the
date specified by the Eligible Lender Trustee.
(b) The Servicer shall deliver to the Depositor, Eligible Lender
Trustee, the Indenture Trustee, the Seller, any Swap Counterparties and the
Rating Agencies, promptly after having obtained knowledge thereof, but in no
event later than five Business Days thereafter, written notice in an Officers'
Certificate of the Servicer of any event which with the giving of notice or
lapse of time, or both, would become a Servicer Default under Section 6.01 or
would cause the Servicer to fail to meet any Rating Agency Condition.
SECTION 3.09. Annual Independent Certified Public Accountants'
Report. The Servicer shall cause a firm of independent certified public
accountants, which may also render other services to the Servicer, the Seller,
the Depositor their Affiliates, to deliver to the Depositor, the Eligible
Lender Trustee, the Indenture Trustee and any Swap Counterparties (with a copy
to the Seller) within 180 days of the end of the Servicer's regular
fiscal-year ended [o] or calendar-year audit period, an audit report that
encompasses the Servicer's portion of the annual Lender Audit (as defined in
the Higher Education Act), or any successor thereto, as required of a lender
under the Higher Education Act, for the preceding year (or, in the case of the
first such report, during the period from the Closing Date to [o]). The
Indenture Trustee shall send a copy of each such report to the Rating
Agencies.
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Such report will also indicate that the firm is independent of the
Servicer within the meaning of the Code of Professional Ethics of the American
Institute of Certified Public Accountants.
SECTION 3.10. Access to Certain Documentation and Information
Regarding Financed Student Loans. Upon at least three Business Days' prior
notice, the Servicer shall provide the Noteholders access to the Student Loan
Files in such cases where the Noteholders shall be required by applicable
statutes or regulations to review such documentation, as demonstrated by
evidence satisfactory to the Servicer in its reasonable judgment. Access shall
be afforded 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 3.11. 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 or the Noteholders, as the case may be.
SECTION 3.12. Appointment of Subservicers.
(a) The Servicer may at any time appoint one or more subservicers to
perform all or any portion of its obligations as Servicer hereunder[;
provided, however, other than with respect to the appointment of the
Subservicer pursuant to clause (b) below, that the Rating Agency Condition
shall have been satisfied in connection therewith;] and provided, further,
that the Servicer shall remain obligated and be liable to the Issuer, the
Eligible Lender Trustee, the Indenture Trustee and the Noteholders for the
servicing and administering of the Financed 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 Financed Student Loans. The fees and expenses of the
subservicer shall be as agreed between the Servicer and its subservicer from
time to time and none of the Issuer, the Eligible Lender Trustee, the
Indenture Trustee or the Noteholders shall have any responsibility therefor,
and
(b) As of the Closing Date, the Servicer has appointed UNIPAC, as
Subservicer to service the Financed Student Loans pursuant to a Subservicing
Agreement.
ARTICLE IV
Deposits into the Collection Account
SECTION 4.01. Deposits into the Collection Account.
(a) The Servicer shall deposit into the Collection Account (in the
case of clauses (i) and (ii) within two Business Days of receipt of freely
available funds therefor):
12
(i) all identifiable payments received by the Servicer by or
on behalf of Obligors on the Financed Student Loans, including any
Guarantee Payments with respect to the Financed Student Loans;
(ii) all Liquidation Proceeds on the Financed Student Loans;
(iii) with respect to Purchased Student Loans, the aggregate
Purchase Amounts, when such amounts are due, as provided in Section
3.05 hereof; and
(iv) all other amounts required to be deposited into the
Collection Account by the Servicer pursuant to the terms hereof.
(b) The Eligible Lender Trustee shall deposit into the Collection
Account within two Business Days of the receipt thereof, the aggregate amount
of Interest Subsidy Payments and Special Allowance Payments received by it
with respect to the Financed Student Loans.
(c) The Seller shall deposit into the Collection Account, the
aggregate Purchase Amount with respect to Purchased Student Loans and all
other amounts to be paid by the Depositor under Section 3.02 of the Loan Sale
Agreement when such amounts are due, as provided in Section 3.03 of the Loan
Sale Agreement.
ARTICLE V
The Servicer
SECTION 5.01. Representations of Servicer. The Servicer makes the
following representations on which the Issuer is deemed to have relied in
acquiring (through the Eligible Lender Trustee) the Financed 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 in the
case of the Initial Financed Student Loans, and will be deemed to speak as of
the applicable Transfer Date, in the case of Prefunded Loans and Serial Loans,
as of the date of the relevant Assignment in the case of any Qualified
Substitute Student Loan, as of the date of origination in the case of any
Consolidation Loan added to the Trust during the Funding Period and as of the
applicable Add-on Consolidation Loan Funding Date in the case of any
Consolidation Loan the principal balance of which has been increased by the
principal balance of a related Add-on Consolidation Loan, but shall survive
the sale, transfer and assignment of the Financed Student Loans to the
Eligible Lender Trustee on behalf of the Issuer (and the origination of such
Consolidation Loans) and the pledge thereof to the Indenture Trustee pursuant
to the Indenture.
(a) Organization and Good Standing. The Servicer is a
national banking association duly organized and validly existing in
good standing under the laws of the United States. It has all
requisite power and authority to execute, deliver and perform its
obligations under this Agreement.
(b) Power and Authority of Servicer. The Servicer has taken
all action necessary to authorize the execution and delivery by it of
this Agreement, and this
13
Agreement will be executed and delivered by one of its officers who
is duly authorized to execute and deliver this Agreement on its
behalf.
(c) Binding Obligation. This Agreement constitutes a legal,
valid and binding obligation of the Servicer, enforceable in
accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization and similar laws relating to creditors'
rights generally and subject to general principles of equity.
(d) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms
hereof or thereof do not conflict with, result in any material breach
of any of the terms and provisions of, or constitute (with or without
notice or lapse of time or both) a material default under, the
charter or by-laws of the Servicer, or any indenture, agreement or
other instrument to which the Servicer is a party or by which it
shall be bound; or result in the creation or imposition of any Lien
upon any of its material properties pursuant to the terms of any such
indenture, agreement or other instrument; or violate any law or, to
the knowledge of the Servicer, 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. Performance by the Servicer of its servicing duties with
respect to the Financed Student Loans, and compliance by the Servicer
with the terms of this Agreement, will not result in the loss of any
Guarantee Payments by the Trust or any reinsurance payments with
respect to any Financed Student Loan by the applicable Guarantor.
(e) No Proceedings. There are no proceedings or
investigations pending against the Servicer or, to its best
knowledge, threatened against the Servicer, before any court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Servicer or its
properties: (i) asserting the invalidity of this Agreement or any of
the other Basic Documents to which the Servicer is a party, (ii)
seeking to prevent the issuance of the Notes or the consummation of
any of the transactions contemplated by this Agreement, or any of the
other Basic Documents, (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, any of the other Basic
Documents or the Notes or (iv) seeking to affect adversely the
federal or state income tax attributes of the Issuer or the Notes.
(f) All Consents. All authorizations, consents, licenses,
orders or approvals of or registrations or declarations with any
court, regulatory body, administrative agency or other government
instrumentality required to be obtained, effected or given by the
Servicer in connection with the execution and delivery by the
Servicer of this Agreement and the performance by the Servicer of its
duties contemplated by this Agreement have in each case been duly
obtained, effected or given and are in full force and effect.
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SECTION 5.02. 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, the Eligible Lender Trustee, the Indenture Trustee, the
Depositor, the Seller, the Administrator or the Noteholders or any of the
officers, directors, employees and agents of the Issuer, the Eligible Lender
Trustee, the Indenture Trustee, the Depositor, the Administrator or the Seller
to the extent that such loss, liability or expense arose out of, or was
imposed upon any such Person 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 any such Person
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; provided, however, that the
Servicer's obligation arising under this Section 5.02 shall apply only to the
extent that the sum of such obligation and any other liabilities of the
Servicer under this Agreement exceeds the Servicer Liability Limit for any
Servicer Liability Period (as such terms are defined in Section 3.05).
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 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 Xxxxx Fargo Bank South Dakota, National Association
as Servicer pursuant to Section 6.01, 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 6.02.
Liability of the Servicer under this Section shall survive the
resignation or removal of the Eligible Lender Trustee or the Indenture Trustee
or the termination of this Agreement and shall include reasonable fees and
expenses of counsel and expenses of litigation. If the Servicer shall have
made any indemnity payments pursuant to this Agreement 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 5.03. Merger or Consolidation of, or Assumption of the
Obligations of, Servicer. The Servicer hereby agrees that, upon (a) any merger
or consolidation of the Servicer into another Person, (b) any merger or
consolidation to which the Servicer shall be a party resulting in the creation
of another Person or (c) any Person succeeding to the properties and assets of
the Servicer substantially as a whole, the Servicer shall (i) cause such
Person (if other than the Servicer) to execute an agreement of assumption to
perform every obligation of the Servicer hereunder, (ii) deliver to the
Eligible Lender Trustee, the Indenture Trustee and any Swap Counterparties 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
15
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. Notwithstanding anything herein to the contrary,
compliance with clauses (i), (ii), (iii) and (iv) above shall be conditions to
the consummation of any of the transactions referred to in clause (a), (b) or
(c) above.
SECTION 5.04. Limitation on Liability of Servicer and Others. Neither
the Servicer nor any of the directors, officers, employees or agents of the
Servicer shall be under any liability to the Issuer or the Noteholders, except
as provided under this Agreement, for any action taken or for refraining from
the taking of any action pursuant to this Agreement or for errors in judgment;
provided, however, that this provision shall not protect the Servicer or any
such Person 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 and any director, officer, employee or agent of 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 that shall
not be incidental to its duties to service the Student Loans in accordance
with this Agreement and that in its opinion may involve it in any expense or
liability; 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
under the Indenture.
SECTION 5.05. Xxxxx Fargo Bank South Dakota, National Association Not
to Resign as Servicer. Subject to the provisions of Section 5.03, Xxxxx Fargo
Bank South Dakota, National Association shall not resign from the obligations
and duties hereby imposed on it as Servicer under this Agreement except upon
determination that the performance of its duties under this Agreement shall no
longer be permissible under applicable law. Notice of any such determination
permitting the resignation of Xxxxx Fargo Bank South Dakota, National
Association shall be communicated to the Eligible Lender Trustee, the
Indenture Trustee, the Rating Agencies and any Swap Counterparties at the
earliest practicable time (and, if such communication is not in writing, shall
be confirmed in writing at the earliest practicable time) and any such
determination shall be evidenced by an Opinion of Counsel to such effect
delivered to the Eligible Lender Trustee, the Indenture Trustee and any Swap
Counterparties 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 Xxxxx
Fargo Bank South Dakota, National Association in accordance with Section 6.02.
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ARTICLE VI
Default
SECTION 6.01. Servicer Default. If any one of the following events
(each, a "Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer to deliver to the Indenture
Trustee for deposit in any of the Trust Accounts any payment required
by the Basic Documents, which failure continues unremedied for three
Business Days after written notice of such failure is received by the
Servicer from the Eligible Lender Trustee, the Indenture Trustee or
the Administrator or after discovery of such failure by an officer of
the Servicer; or
(b) any failure by the Servicer duly to observe or to
perform in any material respect any other covenants or agreements of
the Servicer set forth in this Agreement or any other Basic Document,
which failure shall (i) materially and adversely affect the rights of
Noteholders or any Swap Counterparties and (ii) continue unremedied
for a period of thirty (30) days after the date of discovery of such
failure by an officer of the Servicer or on which written notice of
such failure, requiring the same to be remedied, shall have been
given (A) to the Servicer, by the Depositor, the Indenture Trustee,
the Eligible Lender Trustee or (B) to the Servicer, the Indenture
Trustee, the Administrator and the Eligible Lender Trustee by
Noteholders representing not less than 25% of the Outstanding Amount
of the Notes; or
(c) any limitation, suspension or termination by the
Department of the Servicer's eligibility to service Student Loans
which materially and adversely affects its ability to service the
Financed Student Loans; or
(d) an Insolvency Event occurs with respect to the 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 75% of the Outstanding Amount of the Notes by notice
then given in writing to the Servicer (and to the Indenture Trustee and the
Eligible Lender Trustee if given by the Noteholders) may terminate all the
rights and obligations (other than the obligations set forth in Section 5.02)
of the Servicer under this Agreement. On or after the receipt by the Servicer
of such written notice, all authority and power of the Servicer under this
Agreement, whether with respect to the Notes, the Financed 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
6.02; and, without limitation, the Indenture Trustee and the Eligible Lender
Trustee are hereby authorized and empowered to execute and deliver, for the
benefit of the predecessor Servicer, as attorney-in-fact or otherwise, any and
all documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of the Financed
Student Loans and related documents, or otherwise. The predecessor Servicer
shall cooperate with the successor Servicer, the Indenture Trustee and the
Eligible Lender Trustee in effecting the termination of the responsibilities
and rights of the predecessor Servicer under this Agreement,
transfer to the successor
17
including the 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 Financed Student Loan. All
reasonable costs and expenses (including attorneys' fees) incurred in
connection with transferring the 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 upon presentation of reasonable documentation of such
costs and expenses. Upon receipt of notice of the occurrence of a Servicer
Default, the Eligible Lender Trustee shall give notice thereof to the Rating
Agencies.
SECTION 6.02. Appointment of Successor.
(a) Upon receipt by the Servicer of notice of termination pursuant to
Section 6.01, 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 later of (x) the date 120 days from the
delivery to the Eligible Lender Trustee, and the Indenture Trustee of written
notice of such resignation (or written confirmation of such notice) in
accordance with the terms of this Agreement and (y) the date upon which the
predecessor Servicer shall become unable to act as Servicer as specified in
the notice of resignation and accompanying Opinion of Counsel. 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 and the Administrator. 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. 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 the regular
business of which 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
such compensation arrangements will not result in a downgrading of the Notes
by any Rating Agency) 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 Eligible Lender Trustee. Notwithstanding the
foregoing or anything to the contrary herein or in the other Basic Documents,
the Indenture Trustee, to the extent it is acting as successor Servicer
18
pursuant hereto, 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 6.03. Notification to Noteholders. Upon any termination of,
or appointment of a successor to, the Servicer pursuant to this Article VI,
the Indenture Trustee shall give prompt written notice thereof to Noteholders,
the Administrator, the Eligible Lender Trustee 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 6.04. Waiver of Past Defaults. The Noteholders of Notes
evidencing not less than 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 to the extent provided in such waiver. 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. No such waiver shall extend to any subsequent
or other default or impair any right consequent thereto.
ARTICLE VII
Termination
SECTION 7.01. Termination. Optional Purchase of All Financed Student
Loans. As of the last day of any Collection Period immediately preceding a
Quarterly Payment Date as of which the then outstanding Pool Balance is 10 %
or less of the initial aggregate principal balance of the Notes, the Servicer
or its designee will have the option to purchase the Trust Estate, other than
the Trust Accounts. To exercise such option, the Servicer or its designee will
deposit in the Collection Account an amount equal to the Minimum Purchase
Price; provided, however, that the Servicer or its designee may not effect
such purchase if the aggregate Purchase Amount to be so deposited in the
Collection Account does not equal or exceed an amount equal to the Minimum
Purchase Price.
ARTICLE VIII
Miscellaneous
SECTION 8.01. Amendment. This Agreement may be amended by the
Depositor, the Servicer and the Eligible Lender Trustee, with the prior
written consent of the Indenture Trustee, but without the consent of any of
the Noteholders, 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
or of modifying in any manner the rights of the Noteholders; provided,
however, that such action shall not, as evidenced by an Opinion of Counsel
delivered to the Eligible Lender Trustee and the Indenture Trustee, adversely
affect in any material respect the interests of any Noteholder.
19
This Agreement may also be amended from time to time by the
Depositor, the Servicer and the Eligible Lender Trustee, with the prior
written consent of the Indenture Trustee, the Noteholders of Notes evidencing
not less than a majority of the Outstanding Amount of the Notes and any Swap
Counterparties, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying
in any manner the rights of the Noteholders; provided, however, that no such
amendment shall (a) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments with respect to
Financed Student Loans or distributions that shall be required to be made for
the benefit of the Noteholders 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; provided further, that the prior written consent of any Swap
Counterparties shall not be required if an Opinion of Counsel is delivered to
any Swap Counterparties stating that the proposed amendment to this Agreement
will not adversely affect in any material respect the interests of the
Noteholders or any Swap Counterparties.
Promptly after the execution of any such amendment or consent (or, in
the case of the Rating Agencies, five Business Days prior thereto), the
Eligible Lender Trustee shall furnish written notification of the substance of
such amendment or consent to the Indenture Trustee and each of the Rating
Agencies.
It shall not be necessary for the consent of Noteholders pursuant to
this Section to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the
substance thereof.
Prior to the execution of any amendment to this Agreement, the
Eligible Lender Trustee, the Indenture Trustee and any Swap Counterparties
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
and the Opinion of Counsel referred to in Section 6.02(f) of the Loan Sale
Agreement. The Eligible Lender Trustee and the Indenture Trustee may, but
shall not be obligated to, enter into any such amendment which affects the
Eligible Lender Trustee's or the Indenture Trustee's, as applicable, own
rights, duties or immunities under this Agreement or otherwise.
SECTION 8.02. Protection of Interests in Trust.
(a) The Servicer shall not change its name, identity or structure in
any manner that would, could or might make any financing statement or
continuation statement filed in accordance with Section 6.02(a) of the Loan
Sale Agreement seriously misleading within the meaning of ss. 9-402(7) of the
UCC, unless it shall have given the Eligible Lender Trustee, the Indenture
Trustee, any Swap Counterparties and the Rating Agencies at least five days'
prior written notice thereof and shall have promptly filed appropriate
amendments to all previously filed financing statements or continuation
statements.
(b) The Servicer shall have an obligation to give the Eligible Lender
Trustee, the Indenture Trustee and any Swap Counterparties at least sixty (60)
days' prior written notice of any change of its location for purposes of the
UCC if, as a result thereof, the applicable
20
provisions of the UCC would require the filing of any amendment of any
previously filed financing or continuation statement or of any new financing
statement and shall promptly file any such amendment.
(c) The Servicer shall maintain accounts and records of each Student
Loan accurately and in sufficient detail to permit (i) the reader thereof to
know at any time the status of such Financed Student Loan, including payments
and recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or recoveries on (or with respect to) each
Financed Student Loan and the amounts from time to time deposited in the
Collection Account in respect of such Financed Student Loan.
(d) The Servicer shall, by use of a distinct identification code,
maintain its computer systems so that, from and after the time of sale under
this Agreement of the Financed Student Loans, the Servicer's master computer
records (including any backup archives) that refer to a Student Loan shall
indicate clearly the interest of the Issuer, the Eligible Lender Trustee and
the Indenture Trustee in such Student Loan and that such Student Loan is owned
by the Eligible Lender Trustee on behalf of the Issuer and has been pledged to
the Indenture Trustee. Indication of the Issuer's, the Eligible Lender
Trustee's and the Indenture Trustee's interest in a Student Loan shall be
deleted from or modified on the Servicer's computer systems when, and only
when, the related Financed Student Loan shall have been paid in full or
repurchased.
(e) If at any time the Servicer shall propose to sell, grant a
security interest in, or otherwise transfer any interest in student loans to
any prospective purchaser, lender or other transferee, the Servicer shall give
to such prospective purchaser, lender or other transferee computer tapes,
records or printouts (including any restored from backup archives) that, if
they shall refer in any manner whatsoever to any Financed Student Loan, shall
indicate clearly that such Financed Student Loan has been sold and is owned by
the Eligible Lender Trustee on behalf of the Issuer and has been pledged to
the Indenture Trustee.
(f) The Servicer shall permit the Indenture Trustee and any Swap
Counterparties and their respective agents at any time during normal business
hours to inspect, audit and make copies of and abstracts from the Servicer's
records regarding any Financed Student Loan; provided, however, that the
Servicer is given reasonable prior notice of at least three (3) Business Days.
(g) Upon request, at any time the Eligible Lender Trustee or the
Indenture Trustee shall have reasonable grounds to believe that such request
would be necessary in connection with its performance of its duties under the
Basic Documents, the Servicer shall furnish to the Eligible Lender Trustee or
the Indenture Trustee (in each case, with a copy to the Administrator), within
five (5) Business Days, a list of all Financed Student Loans (by borrower
social security number, type of loan and date of issuance) then held as part
of the Trust, and shall cause the Administrator to furnish to the Eligible
Lender Trustee or to the Indenture Trustee, within 20 Business Days
thereafter, a comparison of such list to the list of Initial Financed Student
Loans set forth in Schedule A to the Loan Sale Agreement as of the Closing
Date, and, for each Financed Student Loan that has been added to or removed
from the pool of loans held by the Eligible Lender Trustee on behalf of the
Issuer, information as to the date as of which and circumstances under which
each such Financed Student Loan was so added or removed.
21
SECTION 8.03. Notices. Unless otherwise agreed by the recipient, all
demands, notices and communications upon or to the Depositor, the Seller, the
Servicer, the Eligible Lender Trustee, the Indenture Trustee, the
Administrator, the Rating Agencies or any Swap Counterparties under this
Agreement shall be in writing, personally delivered or mailed by certified
mail, return receipt requested (or in the form of telex or facsimile notice,
followed by written notice delivered as aforesaid or postage prepaid, first
class mail), and shall be deemed to have been duly given upon receipt;
(a) in the case of the Depositor, to
Xxxxx Fargo Student Loans Receivables I, LLC
[o]
Attention:
Telephone:
Telecopy:
(b) in the case of the Seller, to
Xxxxx Fargo Bank South Dakota, National Association
000 Xxxx 00xx Xxxxxx, X
Xxxxx Xxxxx, XX 00000
Attention:
Telephone:
Telecopy:
(c) in the case of the Servicer, to
Xxxxx Fargo Bank South Dakota, National Association
Attention:
Telephone:
Telecopy:
with a copy to:
[o]
Telephone: [o]
Telecopy: [o]
(d) in the case of the Issuer, to
Xxxxx Fargo Student Loan Trust 2001-1
[o]
with a copy to the Eligible Lender Trustee
at the Corporate Trust Office of the
Eligible Lender Trustee;
(e) in the case of the Eligible Lender Trustee, at the
Corporate Trust Office of the Eligible Lender Trustee;
22
(f) in the case of the Indenture Trustee, at its
Corporate Trust Office;
(g) in the case of the Administrator, to
Xxxxx Fargo Bank Minnesota, National Association
[o]
Attention:
Telephone:
Telecopy:
with a copy to:
[o]
Attention:
Telephone:
Telecopy:
(h) in the case of Moody's, to
Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: ABS Monitoring Department
Telephone: (000) 000-0000
Facsimile: (000) 000-0000;
(i) in the case of Fitch, to
Fitch, Inc.
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Asset Backed Monitoring Unit
Telephone: (000) 000-0000
Facsimile: (000) 000-0000; and
(j) in the case of Standard & Poor's,
a division of The XxXxxx-Xxxx Companies, Inc., to
Standard & Poor's
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Asset Backed Surveillance Department
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(k) in the case of any Swap Counterparties,
to the addresses set forth in any Swap Agreements
23
or, as to each of the foregoing, at such other address as shall be designated
by written notice to the other parties.
SECTION 8.04. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in the succeeding sentence, as provided
in Section 5.03 and as provided in the provisions of this Agreement concerning
the resignation of the Servicer, this Agreement may not be assigned by the
Servicer. This Agreement may only be assigned by the Eligible Lender Trustee
to its permitted successor pursuant to the Trust Agreement.
SECTION 8.05. Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of the Servicer, the Issuer and the
Eligible Lender Trustee and for the benefit of the Administrator, the
Indenture Trustee and the Noteholders, as third party beneficiaries, and
nothing in this Agreement, whether express or implied, shall be construed to
give to any other Person any legal or equitable right, remedy or claim in the
Trust Estate or under or in respect of this Agreement or any covenants,
conditions or provisions contained herein. The Indenture Trustee and any Swap
Counterparties are express third-party beneficiaries and may enforce the
provisions of this Agreement as if they were parties hereto; provided,
however, that in the case of any Swap Counterparties, such right to
enforcement and the right to provide consents or waivers pursuant to the
provisions hereof or to take other actions as provided herein are conditioned
upon its not being in default under any Swap Agreements.
SECTION 8.06. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
SECTION 8.07. Separate Counterparts. This Agreement may be executed
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 8.08. Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 8.09. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Indiana, 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 8.10. Non-Petition Covenants. Notwithstanding any prior
termination of this Agreement, the Servicer shall not, prior to the date which
is one year and one day after the termination of this Agreement with respect
to the Issuer or the Depositor, acquiesce, petition or otherwise invoke or
cause the Issuer or the Depositor to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case
against the Issuer or the Depositor under any federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the
24
Issuer or any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Issuer.
SECTION 8.11. Limitation of Liability of Eligible Lender Trustee and
Indenture Trustee.
(a) Notwithstanding anything contained herein to the contrary (other
than pursuant to subsection (d)), this Agreement has been signed by Bank One
not in its individual capacity but solely in its capacity as Eligible Lender
Trustee of the Issuer and in no event shall Bank One in its individual
capacity or, except as expressly provided in the Trust Agreement, as
beneficial owner of the Issuer 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 or which recourse shall be had solely to the assets of the Issuer.
(b) Notwithstanding anything contained herein to the contrary (other
than pursuant to subsection (d)), this Agreement has been accepted by Chase
Manhattan Bank not in its individual capacity but solely as Indenture Trustee
and in no event shall Chase Manhattan 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.
(c) Notwithstanding any other provision in this Agreement or the
other Basic Documents, nothing in this Agreement or the other Basic Documents
shall be construed to limit the legal responsibility of the Eligible Lender
Trustee or the Indenture Trustee, to the U.S. Secretary of Education or a
Guarantor for any violations of statutory or regulatory requirements that may
occur with respect to loans held by the Eligible Lender Trustee or the
Indenture Trustee pursuant to, or to otherwise comply with their obligations
under, the Higher Education Act or implementing regulations.
[Signatures Follow on Next Page]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers as of the day and year first
above written.
XXXXX FARGO STUDENT LOAN TRUST 2001-1,
as Issuer
By: BANK ONE, NATIONAL ASSOCIATION, not in its
individual capacity but solely as Eligible
Lender Trustee on behalf of the Trust
By:
----------------------------------------------
Name:
Title:
XXXXX FARGO BANK SOUTH DAKOTA,
NATIONAL ASSOCIATION,
as Servicer
By:
---------------------------------------------
Name:
Title:
XXXXX FARGO STUDENT LOANS RECEIVABLES I, LLC,
as Depositor
By:
----------------------------------------------
Name:
Title:
BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Eligible Lender Trustee
By
------------------------------------------------
Name:
Title:
26
Acknowledged and accepted as of the day and year first above written:
CHASE MANHATTAN BANK,
not in its individual capacity but
solely as Indenture Trustee
By:
---------------------------------------
Name:
Title:
27
SCHEDULE A
The Servicer shall maintain each Student Loan File at one of the locations
listed below:
