EXHIBIT 99.3
[Form Of]
PRIVATE LOAN SERVICING AGREEMENT dated as of ________ 1, 1999,
between EFG Student Loan Trust 1999-A (the "Owner"), and EFG Technologies
Inc., as servicer (the "Servicer");
WITNESSETH:
WHEREAS the Owner desires to purchase and/or originate student loans
that are not originated under the Higher Education Act of 1965, as amended;
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 in Appendix A to
this Servicing Agreement, which also contains rules as to usage and
construction that shall be applicable herein.
ARTICLE II.
Custody of Financed Student Loans
SECTION 2.1. Custody of Student Loan Files. To assure uniform quality
in servicing the Student Loans and to reduce administrative costs, Owner
hereby revocably appoints the Servicer as its agent, and the Servicer hereby
accepts such appointment, to act for the benefit of the Owner as Custodian of
the following documents or instruments with respect to each Student Loan:
(a) the original fully executed copy of the note evidencing the
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 Student Loan or any Obligor with respect thereto.
SECTION 2.2. Duties of Servicer as Custodian
(a) Safekeeping. The Servicer shall maintain custody of the Student
Loan Files for the benefit of the Owner and maintain such accurate and
complete accounts, records and computer systems pertaining to each Student
Loan File. 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, 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 Owner to verify the accuracy of the
Servicer's record keeping. The Servicer shall promptly report to the Owner 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 Owner 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 B to this Agreement or
at such other office as shall be specified by written notice to the Owner 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
Owner or its duly authorized representatives, attorneys or auditors a list of
locations of the Student Loan Files and the related accounts, records and
computer systems maintained for Owner by the Servicer.
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SECTION 2.3. 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 an officer of the
Owner.
SECTION 2.4. 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
Owner, or any of its officers, directors, employees and agents as a result of
any gross negligence 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 gross negligence 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 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 Owner for any portion of any
such amount resulting from the willful misfeance, bad faith or negligence of
the Owner.
SECTION 2.5. Effective Period and Termination. The appointment of
Loan Services as Custodian shall become effective as of the date of this
Agreement and shall continue in full force and effect for so long as Loan
Services shall remain the Servicer hereunder. If all the rights and
obligations of Loan Services shall have been terminated under Section 6.01,
the appointment of Loan Services 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, Loan Services shall deliver possession of the Student
Loan Files to the Owner or Owner's designee at such place or places as the
Owner may reasonably designate.
SECTION 2.6. Sub-Custody Agreement. At the direction of the Owner,
the Servicer agrees to enter into a Sub-Custody Agreement for the benefit of,
and in form and substance satisfactory to, each creditor of the Owner
ARTICLE III.
Administration and Servicing of Student Loans
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SECTION 3.1. Duties of Servicer. The Servicer, for the benefit of the
Owner (to the extent provided herein), shall manage, service, administer and
make collections on the 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 Student Loans in accordance with, and otherwise comply with, all
applicable Federal and state laws, including any applicable standards,
guidelines and the applicable Guarantee Agreement, the failure to comply with
which would adversely affect the eligibility of one or more of the Student
Loans for Guarantee Payments. The Servicer agrees to service Serviced Loans in
compliance with the Program Manual.
The Servicer's duties shall include collection and posting of all
payments, responding to inquiries of borrowers on such Student Loans,
monitoring borrower's 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 Owner. Subject to the provisions
of section 3.2, 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 instruments, with respect to such Student Loans; provided;
however, that the Servicer agrees that it will not (a) permit any rescission
or cancellation of a Student Loan except as ordered by a court of competent
jurisdiction or governmental authority or as otherwise consented to in writing
by the Owner or (b) reschedule, revise, defer or otherwise compromise with
respect to payments due on any 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
Student Loans; provided further, however, that the Servicer shall not agree to
any decrease of the interest rate on, or the principal amount payable with
respect to, any Student Loan.
The Servicer shall promptly and routinely furnish the Owner with
copies of all material reports, records, and other documents and data as
required by this Agreement. 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. In performing its
duties hereunder, the Servicer will be guided by and comply with the
applicable requirements of the Guarantor. The Servicer agrees to produce a
clear and precise audit trail for each Student Loan and to comply with such
other reporting, servicing, and operating standards as are contained in this
Agreement.
The Owner hereby grants a power of attorney and all necessary
authorization to the Servicer to maintain any and all collection procedures
with respect to the Student Loans, including filing, pursuing and recovering
claims against the Guarantors for Guarantee Payments and taking any steps to
enforce such Students Loans such as commencing a legal proceeding to enforce a
Student Loan in the name of the Owner. The Owner shall upon the
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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 Student Loan Payments.
(a) The Servicer shall make reasonable efforts (including all efforts
that may be specified under any applicable Guarantee Agreement) to collect all
payments called for under the terms and provision of the 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 Student Loans between
principal and interest in accordance with the terms of each such Student 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 Student Loan.
(b) The Servicer shall make reasonable efforts to claim, pursue and
collect all Guarantee Payments from the applicable Guarantor pursuant to the
Guarantee Agreement with respect to any of the 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 all
comparable guarantee agreements and private student loans that it services. In
connection therewith, the Servicer is hereby authorized and empowered to
convey to the Guarantor the note and the related Student Loan File
representing any Student Loan in connection with submitting a claim to the
Guarantor for a Guarantee Payment in accordance with the terms of the
Guarantee Agreement.
(c) The Owner 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.
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SECTION 3.3. Realization upon Student Loans. The Servicer shall use
reasonable efforts consistent with its customary servicing practices and
procedures and including all efforts that may be specified under the Guarantee
Agreement in its servicing of any delinquent Student Loans.
SECTION 3.4. Servicing Fees. The fees for Servicer's services are
listed on Schedule A to this Agreement. If neither party has given the other
party notice of termination of this Agreement, the Servicer may submit to the
Owner any proposed modification, amendments, or adjustment to the Servicing
Fees; provided however, no change in Servicing Fees shall take place during
the first twenty-four (224) months of this Agreement. The new Servicing Fees
will be for a term of twenty-four (24) months and the new Servicing Fees will
be effective the day following the date of expiration of the prior Servicing
Fees. Servicer can terminate this Agreement in accordance with Section 5.05,
with ninety (90) days written notice if no concurrence on revised fees is
obtained.
Special Services. Owner will compensate Servicer of the performance
by the Servicer of additional services as provided by this paragraph.
Additional services may include but are not limited to the following:
packaging and/or transferring Student Loan documentation or Loans, conversion
of the existing portfolio of the Owner to the Servicer's system, completing
data sheets for the Owner to facilitate the entry of the Owner's existing
Student Loans onto the Servicer's data processing system, ad-hoc computer
reports, data processing expenses, costs of postage and shipping, travel
expenses incurred by the Servicer for training, examining or reviewing Student
Loans at other than the Servicer's offices, supporting audits conducted on the
Servicer by or at the request of the Owner, and providing cure services on
rejected Student Loans (non-Servicer error only). The Owner will also
compensate the Servicer for other miscellaneous services provided by the
'Servicer as requested by the Owner, and for services to remedy the Owner's or
previous owner's failure to perform due diligence and servicing in accordance
with the Guarantor's requirements.
The Servicer will invoice the Owner monthly for Servicing Fees. The
Servicing Fees will be payable monthly and due within thirty (30) days from the
date of the invoice.
SECTION 3.5. Audits. The Servicer agrees to permit the Owner or its
designated agent, at the expense of the Owner, at a reasonable time during
regular business hours and upon at least seventy-two (72) hours notice, to
examine and audit such information as is necessary for the purpose of
verifying the information submitted to the Owner and reviewing the Servicer's
operations with respect to the Serviced Loans. The Owner shall compensate the
Servicer for services provided by the Servicer in support of the audit
including but not limited to the providing of documents, reports, equipment,
and/or research and consultation. The Owner may not use a competitor of the
Servicer (as may reasonably be determined by the Servicer) to perform the
audit. Access to Servicer's confidential or proprietary information is not
allowed.
SECTION 3.6. Access to Certain Documentation and Information
Regarding Student Loans. Upon at least three Business Days' prior notice, the
Servicer shall provide the Owner
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access to the Student Loan files in such case where the Owner shall be
required by applicable statutes or regulations to review such documentation or
perceives such review necessary and advisable to protect Owner's interests in
Student Loans, as demonstrated by evidence satisfactory to the Servicer in its
reasonably judgment. Access shall be afforded without charge, but only upon
reasonably request and during the normal business hours at the respective
offices of the Servicer. Nothing in this Section shall affect the obligations
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 3.7. Servicer Expenses. The Servicer shall be required to pay
all expenses incurred by it in connection with its activities required
hereunder, including fees and disbursements of independent accountants, taxes
imposed on the Servicer, and expenses incurred in connection with
distributions and reports by the Servicer.
SECTION 3.8. Appointment of Subservicer. The Servicer may at any time
appoint a subservicer to perform all or any portion of its obligations as
Servicer hereunder; provided, however, that the Servicer shall remain
obligated to the Owner for the Owner for the servicing and administering of
the Student Loans in accordance with the provisions hereof without diminution
of such obligation by virtue of the appointment of such subservicer and to the
same extent and under the same terms and conditions as if the Servicer also
were servicing and administering the Student Loans. The fees and expenses of
the subservicer shall be as agreed between the Servicer and its subservicer
from time to time and the Owner shall not have any responsibility therefor.
SECTION 3.9. Continuity of Servicing.
In the absence of a Servicer Default, the Owner hereby agrees that it
will ensure that all Serviced Loans originated, acquired, held, or sold by the
Owner and subject to this Agreement will remain with the Servicer for the full
term of this Agreement.
SECTION 3.10. No Impairment
The Servicer shall not impair the rights of the Owner in student
loans.
ARTICLE IV.
The Servicer
SECTION 4.1. Deposits into the Collection Account.
The Servicer shall deposit into the Collection Account (in the case
of clauses (a) within two Business Days of receipt of freely available funds
therefor):
(a) all identifiable payments received by the Servicer by or on
behalf of Obligors in the Student Loans, including any Guarantee Payments with
respect to the Student Loans.
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(b) all other amounts required to be deposited into the Collection
Account by the Servicer pursuant to the terms hereof.
ARTICLE V.
The Servicer
SECTION 5.1. Representations of Servicer. The Servicer makes the
following representations as of the date hereof:
(a) Organization and Good Standing. The Servicer is duly organized
and validly existing as a corporation 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 has the legal right to service the Student Loans.
(b) Power and Authority of the Servicer. The Servicer has the
corporate power and authority to execute and deliver this Agreement and to
carry out its terms, and the execution, delivery and performance of this
Agreement has been duly authorized by the servicer by all necessary corporate
action.
(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 don to
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 certificate of incorporation or by-laws of the Servicer, or any indenture,
agreement or other instrument to which the Servicer is a party or by which it
shall be bound; nor result in the creation or imposition of any Lien upon any
of its properties pursuant to the terms of any such indenture, agreement or
other instrument; nor 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 this servicing duties with respect
to the Student Loans, and compliance by the Servicer with the terms of this
Agreement, will not result in the loss of any guarantee Payments.
Notwithstanding any provision as this Agreement to the contrary, the parties,
acknowledge the Servicer is licensed as a collection agency only in the State
of Maryland and the parties agree that no further licensing is required for
performance of this Agreement.
(e) All Consents. All authorizations, consents, 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
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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.
SECTION 5.2. Indemnification relating to Serviced Loans.
(a) The liability of Servicer under this Agreement is limited to
reimbursing the Owner its uninsured loss on a Loan, up to the amount of
Servicing fees paid on the loan, caused by Servicer's negligence in performing
under this Agreement in the following situations: 1) Servicer's failure to
file a claim on behalf of Owner in a bankruptcy proceeding, known to Servicer,
or to notify Owner of such proceeding the causes a discharge of the debt in
such bankruptcy; or 2) Servicer's inability to produce a certified copy of the
promissory note that causes the Loan to be uncollectible by the Owner in
litigation against the borrower on the Loan, provided that Servicer is
notified by Owner of such litigation and has the right to conduct it or
intervene in it on behalf of Owner.
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C. In the event the Servicer is required to appear or is made a defendant
in any legal action or other proceeding commenced by a person or entity
other than the Owner with respect to any Loan, the Owner shall indemnify
and hold harmless the Servicer for all loss, liability or expenses cause
by the negligence or misconduct of the Owner and not caused by the
negligence or misconduct of the Servicer's SECTION 5.4. 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 Owner 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,
and (iii) 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), and (iii) above shall be conditions to the consummation of any
of the transactions referred to in clause (a), (b) or (c) above.
SECTION 5.4. Limitation on Liability of Servicer or Others. Neither
the Servicer nor any of the directors, officers, employees or agents of the
Servicer shall be under any liability to the Owner, 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. The Servicer and
any director, officer, employee or agent of the Servicer may rely in good
faith on any document of any kind prima face 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 rights and duties of the parties to this Agreement.
SECTION 5.5. Resignation of Servicer. Loan Services may resign from
the obligations and duties hereby imposed on it as Servicer under this
Agreement upon determination that the performance of its duties under this
Agreement shall no longer be permissible under applicable law or that
Servicing Fees have gone unpaid for at least ninety (90) days. Notice of any
such determination permitting the resignation of Loan Services shall be
communicated to the Owner 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
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Owner concurrently with or promptly after such notice. No such resignation
shall become effective until the Owner or a successor servicer shall have
assumed the responsibilities and obligations of Loan Services in accordance
with revised fees as provided in Section 3.04, the Owner shall pay Servicer a
fee of $[ ] per Loan to transfer servicing of the Loans to a successor
servicer.
ARTICLE VI.
Default
SECTION 6.1. Servicer Default. If any one of the following event (a
"Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer to deliver to the Owner any payment
required by this Agreement, which failure continues unremedied for three
Business Days after written notice of such failure is received by the Servicer
from the Owner 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 covenant or agreement of the Servicer set forth in
this Agreement, which failure (i) materially and adversely affects the rights
of Owner and (ii) continues unremedied for a period of thirty (30) days after
the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Servicer, by the Owner; or
(c) 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, the Owner by notice then given in writing to the Servicer
(and to the Owner) 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, shall, without
further action, pass to and be vested in the Owner or such successor servicer
as may be appointed under Section 6.02; and, without limitation, the Owner is
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 Student Loans and
related documents, or otherwise. The predecessor servicer shall cooperate with
the successor servicer, and Owner 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 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 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.
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SECTION 6.2. 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 180 days from the
delivery to the Owner 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 Owner shall appoint a successor servicer.
(b) Upon appointment, the 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) and all the rights granted to the predecessor servicer by the
terms and provisions of this Agreement.
SECTION 6.3. Waiver of Past Defaults. The Owner may waive in writing
any default by the Servicer in the performance of its obligations hereunder,
and any consequences thereof. 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.
SECTION 6.4. Sub-Servicer. Servicer may sub-contract its duties
hereunder to one or more sub-servicers provided that Servicer shall not be
relieved of any duty or liability hereunder in so doing.
ARTICLE VII.
Miscellaneous
SECTION 7.1. Inspection. The Servicer shall permit the Owner and its
agents at any time during normal business hours to inspect, audit and make
copies of and abstracts from the Servicer's records regarding any Student
Loan; provided, however, that the Servicer is given reasonable prior notice of
at lest three (3) Business Days.
SECTION 7.2. Term and Termination.
(a) Unless sooner terminated in accordance with the provisions set
forth hereunder, this Agreement shall remain in full force and effect from the
date of execution hereof for a period of three (3) years.
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(b) This Agreement may be terminated by either the Owner or the
Servicer without cause by providing the other party ninety (90) days written
notice of the intent to terminate, and subject to the conditions of this
Agreement, including Section 3.09.
SECTION 7.3. Notices. Unless otherwise agreed by the recipient, all
demands, notices and communications upon or to the Servicer, or the Owner
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 Owner , to
EFG Student Loan Trust 1999-A
c/o First National Bank
of Chicago, as Trustee
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(b) in the case of the Servicer, to
EFG Technologies
Winston-Salem, North Carolina
or, as to each of the foregoing, at such other address as shall be designated
by written notice to the other party.
SECTION 7.4. Assignment. Notwithstanding anything to the contrary
contained herein, except 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.
SECTION 7.5. 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 7.6. 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 7.7. 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 7.8. 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
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the obligations, rights and remedies of the parties hereunder shall be
determined in accordance with such laws.
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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.
EFG Student Loan Trust 1999 A EFG Technologies
By: First National Bank of Chicago as Trustee By:
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Authorized Signature
By:
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Printed Name Printed Name
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Title Title
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Owner ID
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EFG, INC.
PLATINUM Alternative Loans
THIS SCHEDULE IS CONSIDERED CONFIDENTIAL INFORMATION AND MUST NOT BE COPIED OR
DISCLOSED TO ANYONE OTHER THAN EMPLOYEES OF THE OWNER DIRECTLY CONCERNED WITH
THIS MATERIAL, WITHOUT THE EXPRESS WRITTEN CONSENT OF THE SERVICER.
SCHEDULE A
SCHEDULE OF FEES
As of _______ 1, 1998, the Servicer and EFG Student Loan Trust 1999-A,
hereafter the "Owner", hereby agree that the Servicer shall be paid servicing
fees by the Owner in accordance with the provisions for compensation described
in Article VI of the Servicing Agreement dated as of ________ 1, 1999 (hereafter
"Agreement"), and as further described below; provided, however, that fees set
forth below shall be effective (subject to the provisions of Section 6.1 of the
Agreement) for a period not to exceed twenty-four (24) months beginning as of
the date of this Schedule A.
Section 1. Definitions and Interpretation
1.1 As used in this Schedule A, the following words and phrases shall have the
meanings respectively indicated:
"Agreement" means the Servicing Agreement by and between the Owner
and the servicer and any and all schedules or written instruments thereto.
"Borrower Account" means those combined Loans of a Borrower with the
same Owner and branch, which Loans are in the same status, are the same loan
type (loan types being Xxxxxxxx, Xxxxxxxx Unsubsidized, Alternative, PLUS or
SLS), and which require the same processing (including, but not limited to,
interest rate change frequency, interest rate change type (fixed versus
variable, etc.)) and billing requirements.
"Existing Account" means those Loans to be serviced by Servicer which
were previously serviced by a part other than Servicer.
"New Loan" means a newly disbursed Loan to be serviced by Servicer
which was not previously serviced by a party other than the Servicer.
"On-System Transfer" refers to a transfer of an Account currently
serviced on the Servicer's system to the Owner.
1.2 All capitalized words or phrases used in this Schedule and not otherwise
defined herein will have the same meanings as ascribed to such words or
phrases in the Agreement. This Schedule A is hereby incorporated into the
Agreement and made a part thereof.
Notwithstanding the incorporation of this Schedule A, the Agreement is
intended to and does remain in full force and effect.
Section 2. Loan Servicing Fees
2.1 Conversion Fees. The fees charged for adding Accounts to the Servicer's
data processing system are based on each separate conversion of Accounts.
(a) New Loans. A conversion fee of $[ ] will be charged for each New
Loan received on behalf of the Owner in a tape format.
(b) Existing Account Conversion Fee. A conversion fee of $[ ] will
be charged for each Existing Account received on behalf of the Owner.
(c) Existing Account Document Fee. In addition to the Existing
Account conversion fee identified in subsection 2.1(b) above the Owner will be
charged a $[ ] per hour fee for completion of Conversion Data Sheets
(applies to manual conversion only) and for the performance of a document
check which will be required for all Existing Account conversions.
2.2 Monthly Servicing Fees. The Servicer will be paid a monthly fee as
described in this section for the provision of Services under the Agreement.
a) Deferred-no payments
b) Repayment-current
c) Repayment-delinquent
Loans requiring payments while deferred will be billed at the repayment rate
according to Section 2.2(b) of this Schedule A.
2.3 Commencement of Monthly Rate. The full monthly rate will be effective
commencing with the calendar month in which a Loan is acquired by the
Servicer.
2.4 Billing Status. The billing status of an Account will be determined on the
basis of the status of an Account on the last day of each calendar month.
2.5 Billing Statement. The billing statement for monthly servicing fees will
separately identify (i) fees with respect to each category specified in 2.2,
and (ii) the number of Borrower Accounts and billing rate with respect to each
category. Each billing statement for carrying out transfer and conversion
period servicing will identify the number of Borrowers and the billing rate
for Borrowers transferred and converted to the Servicer's data processing
system during the month.
Section 3. Additional Charges
3.1 Claim Filing. A fee of $[ ] per Account will be billed to the Owner for
completing all Servicer claim documentation and providing said claim
information to the Guarantor. An
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additional fee of $[ ] per Account is also applicable in the even the
Servicer performs bankruptcy claim processing.
3.2 Minimum Billing Statement. If the monthly billing statement (invoice sent
to the Corporation by the Servicer is less than $300.00, the Corporation will
be billed a minimum fee of $300.00. If the monthly invoice exceeds $300.00,
the Corporation will be billed the actual amount due. Monthly billing will not
begin until the Servicer begins servicing the Corporation's first Loan.
3.3 On-system Transfer Fee. The Corporation will pay the Servicer a fee of
$[ ] for each Account the Corporation purchases from a client being serviced
by the Servicer. Additional fees to support client requests for additional
transfer services, e.g., document checks or file examinations according to the
Custodian Agreement, will be $[ ] for each such Account.
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APPENDIX A TO THE
SERVICING AGREEMENT
DEFINITIONS AND USAGE
Usage
The following rules of construction and usage shall be applicable to
any instrument that is governed by this Appendix:
(a) All terms defined in this Appendix shall have the defined
meanings when used in any instrument governed hereby and in any certificate or
other document made or delivered pursuant thereto unless otherwise defined
therein.
(b) As used herein, in any instrument governed hereby and in any
certificate or other document made or delivered pursuant thereto, accounting
terms not defined in this Appendix or in any such instrument, certificate or
other document, and accounting terms partly defined in this Appendix or in any
such instrument, certificate or other document to the extent not defined,
shall have the respective meanings given to them under generally accepted
accounting principles as in effect on the date of such instrument. To the
extent that the definitions of accounting terms in this Appendix or in any
such instrument, certificate or other document are inconsistent with the
meanings of such terms under generally accepted accounting principles, the
definitions contained in this Appendix or in any such instrument, certificate
or other document shall control.
(c) The words "hereof", "herein", "hereunder" and words of a similar
import when used in an instrument refer to such instrument as a whole and not
to any particular provision or subdivision thereof; references in an
instrument to "Article", "Section" or another subdivision or to an attachment
are, unless the context otherwise requires, to an article, section or
subdivision of or an attachment to such instrument; and the term "including"
means "including without limitation".
(d) The definitions contained in this Appendix are equally applicable
to both the singular and plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred to below
or in any agreement or instrument that is governed by this Appendix means such
agreement or instrument or statute as from time to time amended, modified or
supplemented, including (in the case of agreements or instruments) by waiver
or consent and (in the case of statutes) by succession of comparable successor
statutes and includes (in the case of agreements or instruments) references to
all attachments thereto and instruments incorporated therein. References to a
Person are also to its permitted successors and assigns.
Definitions
"Borrower" means an individual who is the maker of a Borrower Note
and who obtains a Student Loan in accordance with the policies and procedures
of a Guarantor.
"Borrower Note" means a promissory note of a Borrower for a Student
Loan set forth on the appropriate form furnished by the Guarantor which
Borrower Note meets the criteria set forth by the policies and procedures of
the Guarantor.
"Business Day" means any day other than a Saturday, a Sunday or a day
on which banking institutions in the States of New York or Indiana are
authorized or obligated by law, regulation or executive order to remain
closed.
"Collection Account" means the account designated as such,
established and maintained pursuant to Section 4.01 of the Servicing
Agreement.
"Custodian" means the Servicer, in its capacity as custodian of the
Borrower Notes or any permitted successor Custodian.
"Deferral" means the period defined by the policies of the related
Guarantor during which a Borrower is entitled to postpone making payments upon
the submission of appropriate documentation.
"Guarantee Agreement" means each agreement to guarantee Student Loans
entered into by the Owner with the Guarantor.
"Guarantee Payment" means any payment made by a Guarantor pursuant to
a Guarantee Agreement in respect of a Student Loan.
"Guarantor" means TuitionGard.
"Insolvency Event" means, with respect to a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in
an involuntary case under any applicable Federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person's affairs, and such
decree or order shall remain unstayed and in effect for a period of sixty
consecutive days; or (b) the commencement by such Person of a voluntary case
under any applicable Federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect, or the consent by such Person to the entry of
an order for relief in an involuntary case under any such law, or the consent
by such Person to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for any substantial part of its property, or the making by such
Person of any general assignment for the benefit of creditors, or the failure
by such
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Person generally to pay its debts as such debts become due, or the taking of
action by such Person in furtherance of any of the foregoing.
"Lien" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind, other than tax liens and any other liens, if any,
which attach to the respective Student Loan by operation of law as a result of
any act or omission by the related Obligor.
"Obligor" on a Student Loan means the borrower or co-borrowers of
such Student Loan and any other Person who owes payments in respect of such
Student Loan, including the Guarantor thereof.
"Officers' Certificate" means a certificate signed by any two (2)
officers of the Servicer.
"Opinion of Counsel" means one or more written opinions of counsel,
who may be an employee of or counsel to the Servicer.
"Program Manual" means the Guarantor instructions for the
administration of the Loans, including, but not limited to, the due diligence
requirements. The manual is provided by the Guarantor to the Servicer, and is
attached to this Agreement as a Schedule, and which may be amended from time
to time.
"Servicer" means Loan Services, in its capacity as servicer of the
Student Loans or any permitted successor servicer.
"Servicer Default" means an event specified in Section 6.1 of the
Servicing Agreement.
"Servicing Agreement" means the Private Loan Servicing Agreement
dated as of [insert date] between the Servicer and the Owner.
"Servicing Fee" has the meaning specified in Schedule A of the
Servicing Agreement.
"Student Loan" means an agreement to repay a disbursement of money to
or on behalf of an eligible student, evidenced by a Borrower Note and
guaranteed in accordance with the policies and procedures of the Guarantor.
"Student Loan Files" means the documents relating to the Student
Loans specified in Section 2.1 of the Servicing Agreement.
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SCHEDULE B
The Servicer shall sub-contract servicing with USA Group Loan Services Inc.
which shall maintain each Student Loan File at one of the locations listed
below:
(a) USA Group Loan Services, Inc.
00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
(b) USA Group Loan Services, Inc.
00000 XXX Xxxxxxx
Xxxxxxx, XX 00000
(c) USA Group Loan Services, Inc.
c/o Indianapolis Vault Company
000 Xxxx Xxxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
(d) USA Group Loan Services, Inc.
c/o Indianapolis Vault Company
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
