FEDERAL FFEL
College Loan Corporation Trust I
March 11, 2002
TABLE OF CONTENTS
| 6 |
Examination of Records |
7 |
| 7 |
Exclusion of Warranties and Limitations of AFSA's Liability |
7 |
| 10 |
Financial and Administrative Responsibility |
10 |
| 12 |
Waiver of Jury Trial |
11 |
| 14 |
AFSA Representations and Warranties |
14 |
Exhibit
| EXHIBIT A |
ORIGINATION SERVICES |
17 |
| EXHIBIT B |
POST-ORIGINATION SERVICES |
21 |
| EXHIBIT C |
SERVICING FEES |
23 |
| EXHIBIT D |
NOTE EXAMINATION ELECTION |
26 |
| EXHIBIT E |
BLANKET CURE TERMS |
28 |
| EXHIBIT F |
PLUS CREDIT REVIEW SERVICES TERMS |
32 |
THIS AGREEMENT is made and entered into as of March 11, 2002 by and
between AFSA Data Corporation (“AFSA”) and College Loan Corporation Trust I, the
beneficial owner (but not legal titleholder) of certain Student Loans (herein called the
“LENDER”) at Long Beach, California, with reference to the following facts:
| A. |
AFSA has developed and is marketing a computerized origination, billing, record
keeping, accounting, reporting and loan management service designated as the
“Guaranteed Student Loan Processing Service” (the
“Service”). |
| B. |
LENDER desires AFSA to assist it in managing its Federal ▇▇▇▇▇▇▇▇ (SSL), Federal
PLUS and Federal Consolidation loans through the use of the Service. |
Now, Therefore, AFSA and ▇▇▇▇▇▇ hereby agree as follows:
| |
A. |
AFSA shall service LENDER’s Federal ▇▇▇▇▇▇▇▇ (SSL), Federal PLUS and
Federal Consolidation loan accounts as provided herein, and any similar student
loan accounts as may be mutually agreed upon (the “Accounts”).
For the purposes of this Agreement an “Account” shall mean one or more
loans having the same holder, borrower (and student in the case of a Federal
PLUS loan), loan program, Guarantor, maturity date and repayment terms. ▇▇▇▇▇▇▇▇
loans, whether subsidized or unsubsidized, shall be considered to have been made
under the same loan program. |
| |
B. |
AFSA shall perform all services and duties customary to the servicing of student
loans in accordance with generally established procedures and industry standards
and practices, including specifically the services and duties specified in
Exhibit A (Origination Services), Exhibit B (Post-Origination Services) and
Exhibit F (PLUS Credit Review Services Terms) attached to this Agreement. Such
services and duties shall be performed with respect to each Account until such
Account is paid in full (whether by the borrower or through the payment of
Guarantee benefits or otherwise) or deconverted from AFSA’s servicing
system in accordance with this Agreement, or this Agreement is otherwise
terminated in accordance with Section 5 below. |
| |
C. |
AFSA shall use reasonable care to perform its services and duties hereunder in
material compliance with, and as required by, (i) the Higher Education Act, (ii)
the applicable Guarantor Regulations, (iii) the applicable Contract of Insurance
or Guarantee, and (iv) any other laws and regulations governing the servicing of
the Accounts, and the foregoing requirements shall determine the general scope
of services hereunder. For purposes of this Agreement the “Higher Education
Act” means Part B of Title IV of the Higher Education Act of 1965, as
amended from time to time, and the rules and regulations of the U.S. Department
of Education or any successor thereto (the “Department”) promulgated
thereunder, as amended from time to time, and “Guarantor Regulations”
means any manual of policies and procedures to be followed under the guarantee
program operated by applicable guarantor of the loans involved (the
“Guarantor”), as well as all supplements, amendments, bulletins and
updates, and all other written or unwritten policies, procedures, rules and
regulations promulgated or adopted, formally or informally by such Guarantor
relating to its guarantee program or the administration, interpretations, claims
review or enforcement policies, procedures and practices thereunder, as the same
are reasonably interpreted and understood by AFSA from time to time. |
| |
D. |
Within a reasonable period after delivery of the loan files to AFSA (generally
within 30 days unless otherwise expressly agreed), AFSA shall (i) establish and
maintain records received by AFSA with respect to each Account and complete
records of AFSA’s servicing of the Account from the date such servicing
commenced, (ii) maintain possession of original promissory notes, loan
applications and other required supplements that it receives from LENDER stored
in a fire-rated, secure vault facility located at ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ or ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, (iii) otherwise
commence servicing the Accounts relating to such loan documents, and (iv)
microfilm or otherwise reproduce the promissory notes, loan applications, and
other required supplements and cause such reproductions to be stored at Brambles
Information Management Corporation or any equivalent facility. |
| |
E. |
If requested in writing by LENDER for any loans not originated by AFSA for
LENDER hereunder, AFSA shall make a Full Note Examination or an Abbreviated Note
Examination of the original promissory note and other loan documentation for
each Account following receipt by AFSA for servicing, as requested by ▇▇▇▇▇▇ on
Exhibit D (Note Examination Election). Following such initial election, ▇▇▇▇▇▇
may from time to time with AFSA’s consent, which consent shall not be
unreasonably withheld, select a different loan examination option for a
particular set of loans or for all subsequent loans by making a new election
with respect thereto or by other appropriate written notice to AFSA. |
| |
F. |
By undertaking the loan examination and other duties provided above, AFSA
assumes no responsibility for the origination, disbursement, documentation or
prior servicing of any loan (except to the extent that AFSA performed or was
obligated to perform any of these services), it being understood and agreed that
the originator and/or prior servicer shall be responsible for all aspects of
each loan prior to the date on which AFSA is required to commence servicing of
such loan hereunder. AFSA shall not be liable in the overall conduct of the loan
examination for the entire portfolio being purchased by CLIENT for failure,
despite its reasonable efforts, to detect any prior defect or note any exception
during the loan examination process. In the event of any such defect or
exception, LENDER shall exhaust all recourse and remedies against the original
lender, prior services, or other responsible parties before asserting any claim
against AFSA related thereto. The microfilm or other reproduction of each
borrower file made by AFSA following delivery to AFSA for servicing shall be
prima facie evidence of the record of loan documentation received and reviewed
by AFSA. |
| |
G. |
If requested in writing by LENDER AFSA shall provide cure services for loans
that are unguaranteed due to non-AFSA errors, as provided in Exhibit E
(Blanket Cure Terms). |
| |
H. |
If AFSA reasonably determines that any Account has been rejected by a Guarantor
and cannot or is not to be cured hereunder, ▇▇▇▇▇▇ is responsible for providing
direction to AFSA upon AFSA’s written request for the disposition of such
Account, which shall remain on AFSA’s servicing system pending such
direction from LENDER. If LENDER instructs AFSA to deconvert any Accounts, AFSA
shall promptly provide the following deconversion services: |
| |
(1) |
Any files related to Accounts to be returned to LENDER shall be assembled in
substantially the manner in which they were received by AFSA, including any
pertinent documents or information received or created by AFSA during its
servicing; |
| |
(2) |
The files related to such Accounts shall be properly deposited in the U.S. Mail
as certified or registered mail addressed to LENDER unless otherwise agreed by
LENDER and AFSA. AFSA. shall not be liable for any losses, costs or damages
incurred by LENDER if files are lost after being properly deposited in the U.S.
Mail. If so instructed by LENDER at any time, AFSA shall procure at
LENDER’s expense such available insurance coverage as LENDER may desire
with respect to such shipments; |
| |
(3) |
A transmittal shall be provided by AFSA to LENDER listing each Account and
certain other mutually-agreeable Account information; and |
| |
(4) |
Each Account record shall be removed from the AFSA servicing system. |
| |
The deconversion and file preparation and shipping
fees specified in Exhibit C (Servicing Fees) shall apply to and shall be payable
concurrently with any deconversion of rejected Accounts as provided above, as
well as any deconversion of Accounts following any expiration or termination of
this Agreement, or any other removal of Accounts from this Agreement; provided,
however, that no such fees shall be charged for any deconversion of Accounts
upon termination of this Agreement pursuant to Section 5.B. (upon AFSA breach)
or 5.C. or 5.D. (except for reimbursement of reasonable shipping charges as
provided therein).
|
| |
I. |
If any of the Accounts are guaranteed by a Guarantor which permits electronic
interface or expedited or express claims filing or review processing (for
example, Texas Guaranteed Student Loan Corporation’s Claims Automated
Processing System (TGSLC’s GAPS) or Northwest Education Loan
Association’s Express Claim Program (NELA’s ECP)), AFSA may
participate therein on LENDER’s behalf. In such event, AFSA is hereby
authorized to enter into any participation agreement or similar documentation
required by such Guarantor on LENDER’s behalf as its agent in order to
participate therein. |
| |
J. |
In originating Consolidation Loans hereunder, AFSA shall use best efforts to
meet the servicing goals as set forth on Attachment 1 to Exhibit A
(Consolidation Loan Origination Servicing Goals). |
| |
A. |
LENDER shall promptly transmit or cause to be transmitted to AFSA any material
written communications it receives at any time with respect to any
borrower’s Account, including but not limited to letters, notices of death
or disability, adjudications of bankruptcy and like documents, and forms
requesting deferment of repayment or loan cancellations. AFSA will have no
liability for reliance upon information that would have been corrected by timely
transmittal to it of any such written communication, and shall not bear any
related servicing or other costs which reasonably could have been avoided
thereby. |
| |
▇. |
▇▇▇▇▇▇ shall examine all reports submitted to it by AFSA promptly upon receipt
and promptly notify AFSA of any discovered errors. AFSA shall not be responsible
for damages or losses caused by any error disclosed by a report to LENDER unless
such error is brought to AFSA’s attention within sixty (60) days after
receipt by ▇▇▇▇▇▇. This time restriction shall be extended for the 799 ED
Billing Form, for which the LENDER shall have 180 days to bring an error to the
attention of AFSA. |
| |
C. |
LENDER shall be responsible for assuring that the form documents to be used in
the origination of the Accounts (other than such documents created
independently by AFSA) are in compliance with all applicable federal, state and
local laws and regulations, including without limitation any consumer loan laws
or disclosure requirements applicable thereto, and shall defend, indemnify and
hold AFSA harmless from any violation or non-compliance with any of the
foregoing. |
| |
A. |
AFSA shall establish a disbursement bank account for loan origination. Such bank
account shall be in a bank designated by AFSA which is reasonably acceptable to
LENDER. Funding of said account shall be by wire transfer on a schedule which
complements the mutually agreed upon disbursement schedule. |
| |
Based on a written funding request to be delivered by AFSA, LENDER shall
initiate transfer of funds to an AFSA-designated bank account at least one
day prior to funding. The parties acknowledge and agree that in keeping with
customary industry practice, the funding of Consolidation Loans shall occur
hereunder prior to obtaining the guarantee on such loan from the applicable
Guarantor, and AFSA shall not be liable to LENDER for any subsequent failure or
inability to obtain or collect any guarantee on a Consolidation Loan except and
only to the extent such failure or inability is directly and solely due to
AFSA’s gross negligence or willful misconduct. |
| |
B. |
All borrower and other remittances shall be deposited to an AFSA account at a
remittance banking/lock box facility at a bank selected by AFSA which is
reasonably acceptable to LENDER, with all earnings on such account being
retained by AFSA. Such remittances shall be promptly processed and posted to
borrower Accounts and the associated funds shall be transferred to LENDER by ACH
or wire transfer on a mutually acceptable schedule. |
| |
▇. |
▇▇▇▇▇▇ shall pay AFSA for services rendered in the prior month according to the
schedule of fees in Exhibit C (Servicing Fees), within fifteen (15) days after
receipt of an invoice sent by AFSA to LENDER. Payments become delinquent if not
received by AFSA within thirty (30) days from the date of receipt, whichever is
later, and thereafter shall incur a late charge of one and one-half percent
(1½%) per month until paid. |
| |
B. |
The fees specified in Exhibit C shall remain fixed during the first twelve (12)
months of this Agreement. Unless otherwise expressly agreed, charges during each
subsequent twelve (12) month period of this Agreement may be increased over such
fees charged during the previous twelve (12) month period by an amount equal to
the greater of (i) the percentage increase in the U. S. Department of
Labor’s Consumer Price Index for Urban Wage Earners and Clerical Workers,
U.S. City Average (1982-84=100) (the “CPI”) for the most recent twelve
(12)month period available at the time of each annual adjustment, or (ii) three
percent (3%) per annum. If at any adjustment date the CPI is no longer
published, then any replacement index specified by the Bureau of Labor
Statistics or successor U.S. governmental agency shall be substituted therefor,
with appropriate application of any necessary conversion formula as may be
specified by such agency, or if no such replacement index has been so specified,
then a comparable cost-of-living index as may be mutually agreed between the
parties shall be used.) |
| |
C. |
AFSA’s fees are subject to adjustment by AFSA (i) in the event of any
increase in telephone or postage rates, or (ii) as provided in Section 5.C
below. |
| |
D. |
In addition to any other servicing fees or expense reimbursements to which AFSA
shall be entitled under this Agreement, ▇▇▇▇▇▇ agrees to reimburse AFSA for (i)
any sales or use taxes or similar taxes now or hereafter imposed upon any goods
or services provided by or activities of AFSA hereunder, and (ii) any expenses
which AFSA incurs as a result of any additional work required due to any
transfer of the guarantee on serviced loans to a new or successor Guarantor, or
any Guarantor error, or any testing, reconciliation or remediation project or
other non-routine activity required by the particular needs of Guarantor or
LENDER or resulting from third party errors. |
| |
E. |
In the event of any good faith dispute by ▇▇▇▇▇▇ regarding any amount billed by
▇▇▇▇, LENDER may by written notice to AFSA detailing the grounds for the dispute
withhold payment of such disputed amount for a reasonable period pending
resolution of the dispute, but shall pay the undisputed portion billed when and
as due. If the dispute has not been mutually resolved within sixty (60) days
after the date initially due, LENDER shall deposit the withheld amount into an
independent escrow reasonably satisfactory to AFSA pending mutual agreement or
court decision regarding proper disposition of such funds. Failure of LENDER to
pay the undisputed portion of a billing or to place any disputed amount in
escrow as provided above shall constitute a default hereunder. |
| |
F. |
AFSA shall have the right to offset any amounts due from AFSA to LENDER against
the servicing fees or other amounts due AFSA hereunder. |
| |
A. |
This Agreement is for a term beginning March 11, 2002, and ending on the fifth
(5th) anniversary of such date; provided, however, that unless either party
shall give the other written notice of its intention not to renew this Agreement
at least ninety (90) days prior to its scheduled expiration date, this Agreement
shall automatically renew for successive twelve (12)-month periods thereafter,
subject to any renegotiated terms which may be mutually desired. |
| |
B. |
Either party may terminate this Agreement before its expiration upon a material
breach by the other parry, if such breach has not been cured within ninety (90)
day after written notice of such material breach bas been sent to the other
party, which written notice shall specify in reasonable detail the alleged breach
and reference this provision; provided, however, that the notice and cure period
shall only be thirty (30) days if the breach is the non-payment of AFSA’s
fees or other charges. |
| |
C. |
In the event of changes in the Higher Education Act, Guarantor Regulations, or
other current or future law, regulation or other requirement applicable to the
serviced loans, including without limitation, any changes in any interpretation,
claims review or enforcement policies, procedures or practices with respect
thereto (and including, without limitation, implementation or enforcement of
third-parry servicer regulations promulgated by the Department), which in
AFSA’s reasonable determination expose AFSA to materially increased risk of
liability to the Secretary of Education, LENDER or any other party, impose
materially increased duties or obligations upon AFSA, or cause AFSA to incur
materially additional expense, or materially restrict or derogate from
AFSA’s indemnification rights or liability limitations under this Agreement.
AFSA shall have the right, at its option, to (i) terminate this Agreement upon
180 days’ prior written notice to LENDER, or (ii) propose to LENDER an
amendment to this Agreement which in AFSA’s reasonable judgment
appropriately addresses the increased risk, duties or obligations (which may
include an adjustment to AFSA’s fees and/or expense reimbursements), and if
the parties are unable to agree upon such amendment within thirty (30) days
after the same is submitted to LENDER, AFSA shall be entitled to terminate this
Agreement upon 180 days’ prior written notice to LENDER. AFSA shall not be
entitled to charge any deconversion fees hereunder in connection with the
deconversion of ▇▇▇▇▇▇’s loans from AFSPA’s system following any
termination by AFSA under this Section 5.C, but AFSA shall be entitled to
receive reimbursement of its reasonable file preparation and shipping costs. |
| |
D. |
In the event that AFSA announces or actually commences a wind-down of its
servicing activities for the purpose of exiting the student loan servicing
business, LENDER shall have the right, at its option, to terminate this
Agreement upon 90 days’ prior written notice to AFSA. In such event AFSA
shall not be entitled to charge any deconversion fees hereunder in connection
with the deconversion of ▇▇▇▇▇▇’s loans from AFSA’s system following
any termination by AFSA under this Section 5.D, but AFSA shall be entitled
to receive reimbursement of its reasonable file preparation and shipping costs. |
| 6. |
Examination of Records. |
LENDER or its agent shall have the right, at reasonable hours and under reasonable
circumstances on a mutually-agreeable schedule, to examine all ▇▇▇▇▇▇’s assigned
student loan records and material serviced by AFSA that it deems necessary to determine
compliance with this Agreement. AFSA shall submit to like examination by any governmental
agency or authority having supervisory jurisdiction over LENDER.
| 7. |
Exclusion of Warranties and Limitations of AFSA’s
Liability. |
| |
A. |
AFSA shall be entitled to reasonably rely upon any information or data supplied
to it by LENDER, any party on ▇▇▇▇▇▇’s behalf, or any third party normally
relied upon by servicers in the student loan industry, and shall have no
liability for any error or loss caused by such information or data being
incomplete or inaccurate. AFSA shall not be responsible for reviewing and
verifying the compliance of forms and processes prescribed by the Secretary or
Guarantor with applicable state and federal laws and regulations, and AFSA shall
be fully entitled to rely upon and use such materials and processes, unless
notified to the contrary by LENDER, and shall have not liability for any damages
or loss resulting from such use absent such notice. |
| |
B. |
AFSA shall use due care and diligence in performing its services in a timely
manner consistent with the applicable student loan program as reasonably
interpreted and understood by AFSA. AFSA hereby excludes and disclaims any and
all other warranties with respect to its services under this Agreement, and no
employee, agent or representative of AFSA has the authority to bind AFSA to any
other oral or written representation or warranty. LENDER will review all
processing output, reports and other information provided to it by AFSA and will
use due care and diligence to detect and notify AFSA of any errors therein which
▇▇▇▇▇▇ discovers. Upon prompt notification to or discovery by AFSA of any
processing error or data inaccuracy, AFSA shall re-perform any processing to the
extent practicable and necessary, without charge if AFSA is at fault and
otherwise at a rate equal, in AFSA’s best and reasonable judgment, to the
greater of its original charge for such processing or its direct and allocated
indirect cost of such reprocessing. ▇▇▇▇ agrees to provide, at cost to LENDER if
necessitated by the nature of the data submitted, such evidence as LENDER may
reasonably require which will verify the complete and proper execution of the
corrections. |
| |
C. |
AFSA shall be entitled to cure at its own expense any error or omission in the
performance of its duties under this Agreement by the reperformance of such
duties to the extent such reperformance will reasonably eliminate or mitigate
any losses to LENDER caused by such error or omission. |
| |
D. |
Notwithstanding the form in which any legal or equitable action may be brought,
whether in contract, tort, negligence, strict liability or otherwise,
AFSA’s liability, if any, arising out of or in any way related to any act
or omission by AFSA in connection with this Agreement or its services hereunder,
including but not limited to errors solely due to AFSA, its equipment,
operators, programmers, or program, shall be limited to direct losses of
principal and interest on rejected claims resulting directly and solely from
AFSA’s negligence or willful misconduct. In the event a loan is rejected by
a Guarantor directly and solely due to AFSA’s negligence or willful
misconduct, and AFSA is unable to cure the loan within twelve (12) months of the
final reject date. AFSA shall reimburse LENDER for all principal and accrued
interest loss thereon (including such loss during the period of non-guarantee) by the
end of the thirteenth (13th) month following the final reject date, and the loan
shall thereupon be assigned and transferred to AFSA or its designee, and this shall
be the sole and exclusive remedy of LENDER relating to such occurrences. |
| |
E. |
Notwithstanding any other provision of this Agreement, AFSA’s liability, if
any, arising out of or in any way related to any act or omission by AFSA in
connection with any leans which (i) entered repayment status prior to the date
that AFSA’s assumes servicing responsibility, or (ii) have previously been
cured following non-AFSA servicing error (i.e., rehab loans), shall be limited
to general money damages in an aggregate amount with respect to any Account not
to exceed the amount paid for AFSA’s services by LENDER with respect to
such Account, and this shall be the sole and exclusive remedy of LENDER relating
to such occurrences. |
| |
F. |
AFSA shall have no liability for its failure to comply with any law, rule,
regulation or other requirement applicable to any of the serviced loans,
including without limitation any change in any interpretation, claim reviews or
enforcement policies, procedures or practices with respect thereto, (i) which
was not articulated in writing and actually made known to AFSA or the student
loan servicing industry generally a reasonable period in advance of its
implementation, (ii) which is inconsistent with general industry practices
or prior Guarantor conduct or requirements unless and until AFSA shall have been
notified thereof and had a reasonable opportunity to comply with such new
requirement and then only with respect to servicing performed after the date
thereof (i.e., not on a retroactive basis with respect to servicing which has
previously occurred based upon prior requirements), or (iii) during any period
in which the Department and/or any Guarantor shall have indicated that it will
not enforce any such requirement, even if such requirement may legally be in
effect. |
| |
G. |
In no event, regardless of AFSA’s ability to reperform or cure any error,
shall AFSA be liable under any circumstances, (i) for any incidental, indirect,
special, punitive or consequential damages, or (ii) for failure to provide
services herein for reasons beyond its reasonable control, or (iii) for any
violation of applicable law, regulation or other requirement under this
Agreement, where AFSA’s action or inaction was not negligent as determined
by reference to legally relevant factors (including without limitation general
industry standards in effect at such time), or (iv) for any losses, liabilities
or expenses directly or indirectly arising in whole or in par from or relating
to any Guarantor error, or (v) for any losses, liabilities or expenses directly
or indirectly arising in whole or in part from or relating to any data
transmission or electronic data interchange (EDI) failure or error not solely
and directly due to AFSA’s negligence, or (vi) for the uncollectibihty or
non-payment of any amounts payable on or with respect to Accounts serviced
hereunder, or the failure of any Guarantor to pay any claim on a loan Account
for any reason (including but not limited to the bankruptcy or insolvency of the
Guarantor) except where the uncollectible or failure to pay such claim is
directly and solely as a result of AFSA’s negligence or willful misconduct
as provided hereinabove. These limitations on AFSA’s liability and
exclusion of damages are independent of any other remedy or provision herein and
shall not be affected by AFSA’s inability to reperform or cure any error or
any failure of any other remedy or provision. |
| |
H. |
AFSA’s sole liability under or in connection with this Agreement or its
services, whether in contract, tort, negligence, strict liability, pursuant to
violation of statute or regulation, or under any other theory, shall be limited
as provided in this Section 7 and Section 8, and the provisions hereof shall
constitute the sole and exclusive remedy of LENDER for breaches hereof by AFSA. |
| |
I. |
No claim or action, regardless of force, arising out of or in any way related
to any act or omission by AFSA in connection with this Agreement or its services
hereunder shall be brought by LENDER more than one year after ▇▇▇▇▇▇ discovers
the act or omission by AFSA giving rise to such claim or action. In the case of
rejected claims filed by ▇▇▇▇▇▇ due to AFSA negligence or willful misconduct,
such one-year period shall commence at the end of the 13th month following the
final reject date. |
| |
J. |
The parties agree that the foregoing provisions shall survive the termination of
this Agreement and have been reflected in the amount of the charges payable by
LENDER to AFSA for the Service, are an essential part of the basis for the
bargain between the parties, and that AFSA would not have entered into this
Agreement but for such provisions. |
| |
A. |
If AFSA or LENDER is required to appear in or is made a defendant in any legal
action or other proceeding commenced by a borrower or other third party with
respect to any loan Account for which services are provided hereunder, subject
to the limitations contained in this Agreement, LENDER shall defend and
indemnify AFSA against, and hold it harmless from, all claims, losses,
liabilities, and reasonable expenses (including reasonable attorneys’ fees)
arising thereunder, unless and until a final judgment is entered by a court
properly holding that the claim or action resulted directly and solely from the
negligence or willful misconduct by AFSA under this Agreement, in which case
AFSA shall thereafter defend and indemnify LENDER against, and hold it harmless
from, all claims, losses, liabilities, and expenses (including reasonable
attorneys’ fees) arising from such negligence or willful misconduct
(subject to Section 7 above). In particular, without limiting the foregoing, it
is understood that AFSA shall be entitled to a defense and indemnity as
provided above where a student alleges that he or she did not receive a proper
education and/or was defrauded by the school or lender, or that a prior or
subsequent servicer or collection agency committed any error or misconduct or
violated any law or regulation. |
| |
B. |
Notwithstanding the foregoing, AFSA will further defend, indemnify and save
LENDER harmless from and against any and all claims, losses and liability
relating to (i) any infringement or threatened infringement of any patent,
copyright trademark, trade secret or other proprietary rights of any third
party, or (ii) any physical loss or damage to property of a third parry, or
(iii) any loss or damage arising from bodily injury, including death, when such
loss or damage is caused by the negligent acts, omissions or intentional
wrongdoing of AFSA, its employees, subcontractors or agents and which arise out
of the performance of this Agreement, provided that (a) LENDER gives AFSA prompt
written notice of any such claim of loss or damage and, (b) if such loss or
damage involves claims by third parties, LENDER allows AFSA to control, and
reasonably cooperates with AFSA in, any related defense and all related
settlement negotiations. |
AFSA shall maintain a reasonably comprehensive contingency plan for
disaster recovery and continued servicing of the Accounts (the “Plan”) and allow
▇▇▇▇▇▇ to review said Plan at AFSA’s site. Such review shall be no more frequently
than on an annual basis or within sixty (60) days of implementing any material changes to
the Plan.
| 10. |
Financial and Administrative Responsibility. |
| |
A. |
Each party hereto represents that it is currently in compliance with, and agrees
to maintain its compliance with, all financial and administrative responsibility
standards or requirements which may be established from time to time by the
Department or any Guarantor for participation in the Title IV, Higher Education
Act programs for which AFSA provides services hereunder. Each party shall have
the right to terminate this Agreement upon ninety (90) days’ written notice
to the other in the event that the Department’s financial or administrative
responsibility standards or requirements are hereafter changed and as a result
such party does not thereafter satisfy such standards or requirements. |
| |
B. |
AFSA agrees to provide LENDER with annual consolidated audited financial
statements, as soon as the same are made available to AFSA during the term of
this Agreement |
| |
C. |
AFSA agrees to maintain insurance of bonds and other insurance in full force and
effect at all times during the term of this Agreement that meet the following
requirements: (i) a fidelity bond (or direct surety bond) with a policy limit of
not less than $50,000,000, a deductible of not more than $1,000,000 and per
occurrence coverage of not less than $50,000,000; and (ii) an errors and
omissions policy with a policy limit of not less than $50,000,000 in the
aggregate per occurrence (with no per occurrence coverage minimum), and a
deductible of not more than $1,000,000. |
AFSA agrees to provide LENDER with (i) a copy of AFSA’s annual SAS 70
servicer audit without charge, and (ii) a copy of AFSA’s Lender Audit Guide audit
report, as required by the Department under the Act, at a prorated charge consistent with
the manner charged by AFSA generally to its other clients.
▇▇▇▇▇▇ acknowledges that AFSA shall have the right and obligation to
cooperate fully with independent auditors, the Secretary of Education, the Department’s
Inspector General, the Comptroller General of the United States, and any applicable
Guarantor, or their authorized representatives, in the conduct of audits, investigations,
and program reviews with respect to LENDER or the Title IV, Higher Education Act programs
administered by AFSA for LENDER, as authorized by law. Furthermore, ▇▇▇▇▇▇ agrees to
provide AFSA with written notice and copies of all audit reports or findings (preliminary
or final) relating to AFSA’s administration of any aspect of such program for LENDER,
as soon as such audit reports or findings are available to LENDER. ▇▇▇▇▇▇ further agrees
to indemnify, reimburse and hold AFSA harmless from the cost of cooperating with,
responding to or appealing any such audit report or finding (including any reasonable cost
of an attestation engagement performed for any such response or appeal, attorneys’
fees and costs), unless such audit was caused by any AFSA misconduct.
| 12. |
Waiver of Jury Trial. |
THE PARTIES HEREBY EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY OF
ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR ANY
OTHER DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR IN
ANYWAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO WITH RESPECT TO THIS AGREEMENT OR ANY SUCH OTHER DOCUMENT OR AGREEMENT,
OR THE SERVICES AND TRANSACTIONS RELATED HERETO OR THERETO, WHETHER NOW EXISTING
OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT OR OTHERWISE.
| |
A. |
All specifications, tapes, data cards, programs, forms and procedures used or
developed by AFSA in connection with this Agreement (except those supplied by
LENDER) shall be and remain the sole property of AFSA. |
| |
B. |
All information belonging to LENDER shall be retained by AFSA in confidence.
AFSA shall not use, make, and/or maintain a list of LENDER’s Account
names, addresses, and/or account numbers for any purpose other than fulfillment
of its duties as Servicer under this Agreement. Upon termination or expiration
of this Agreement, AFSA shall deconvert the loan Accounts as provided in Section
1.H above. This provision shall survive termination of this Agreement. |
| |
C. |
Both parties agree to maintain the confidentiality of this Agreement and all
amendments hereto, and the terms hereof, and any audit reports or findings
(preliminary or final) relating to AFSA’s administration of any Title IV,
Higher Education Act program for LENDER, and not to disclose or deliver the same
(or any copies, excerpts or summaries thereof) to the Department, any other
government agency, national accrediting agency, or any other third party
(whether pursuant to regulation, governmental request, or otherwise) without
first using best efforts to give the other party prior written notice of such
intention, which notice shall be sent by fax, Federal Express or other overnight
delivery service, and addressed to the other party. The other party may, at its
option, thereupon take appropriate steps to assure that any such information
which may be entitled to protection from disclosure under the Freedom of
Information Act (FOIA) is so protected, and the first party shall cooperate
with such efforts to protect from FOIA disclosure any information of the other
party which the other party believes to constitute trade secrets, or of a
commercial or financial interest, or of a privileged or confidential nature,
etc., including the inclusion with such disclosure or delivery of appropriate
submissions asserting protection from FOIA disclosure. Notwithstanding the
foregoing, either party may disclose or deliver any of the foregoing to their
independent auditors on a confidential basis, provided that such auditors shall
not disclose or deliver the same without the disclosing party first complying
with this paragraph. |
| |
D. |
This Agreement and its performance shall be governed by the internal laws of the
State of California. |
| |
E. |
This Agreement may not be assigned except to an entity succeeding to
substantially all of the business or assets of the assigning party, with written
notice to the other party, provided, however, that ▇▇▇▇▇▇ may collaterally
assign its interest hereunder to a trustee under en indenture pursuant to which
the Lender incurs indebtedness (the “Trustee”). The Trustee shall be a
third party beneficiary hereof, entitled to enforce the provisions of this
Agreement against AFSA. |
| |
F. |
AFSA reserves the right to change any part or all of the Service; provided,
however, that such change shall not abrogate or in any way modify the
substantive provisions of, and general duties of AFSA under, this Agreement. |
| |
▇. |
▇▇▇▇▇▇ agrees to provide AFSA upon request with ▇▇▇▇▇▇’s current financial
statements and such other financial information as AFSA may request from time to
time. |
| |
H. |
If either party is rendered unable, wholly or in part, to carry out its
obligations under this Agreement (other than the payment of money) by reason of
any act of God, civil disturbance, strike or labor unrest, breakdown or
interruption of power or communications systems, computer or other equipment
failure, failure of subcontractors or suppliers, or other circumstances or event
outside such party’s reasonable control (whether or not similar to the
foregoing), the obligations of such party shall be suspended to the extent
thereof, and such party shall not be liable to the other party for any
non-performance hereunder or incomplete performance as a result of such
occurrence. |
| |
I. |
This Agreement supersedes any prior agreement and contains the entire agreement
of the parries on the subject matter hereof. No other agreement, statement or
promise made by any party to any employee, officer or agent of the other party
to this Agreement, or any other person, that is not in writing and signed by both
parties to this Agreement, shall be binding upon them. No waiver, alteration or
modification of the Agreement shall bind AFSA or LENDER unless in writing and
duly executed by AFSA and ▇▇▇▇▇▇. |
| |
J. |
In the event any Account is transferred off AFSA’s servicing system,
whether in connection with a termination or expiration of this Agreement, a sale
of Accounts or otherwise, unless otherwise expressly provided herein or agreed
in writing at the time of such transfer off, ▇▇▇▇▇▇ agrees to pay AFSA the
deconversion and file preparation and shipping fees specified in Exhibit C
(Servicing Fees). |
| |
K. |
Any notice required under this Agreement shall be in writing and shall be
effective upon personal delivery or facsimile transmission or upon receipt after
being sent by Federal Express or mailed by registered or certified mail, return
receipt requested, postage pre-paid, addressed as follows: If to AFSA, at One
World Trade ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-2200, Attn:
President, or if to LENDER, at the address for LENDER set forth in AFSA’s
records for delivery of reports hereunder. Each party may specify a different
address by sending to the other written notice of such different address as
provided herein. |
| |
L. |
The section captions in thus Agreement are for convenience only and will not be
deemed part of this Agreement or used in the interpretation thereof. Both parties
and their counsel have participated in the preparation, drafting and negotiation
of this Agreement. Accordingly, this Agreement shall be construed according to
its fair language and any ambiguities shall not be resolved against either party
as the drafting party. |
| |
M. |
The invalidity, illegality or unenforceability of any provision or term of this
Agreement in any instance shall not affect the validity or enforceability of
such provision in any other instance or the validity or enforceability of any
other provision, and each such provision shall be enforced to the fullest extent
possible. |
| |
N. |
This Agreement may be executed in one or more counterparts, each of which shall
be deemed an original and all of which taken together shall constitute one and
the same agreement. |
| 14. |
AFSA Representations and Warranties. |
|
AFSA hereby represents and warrants to LENDER the following: |
| |
(i) |
AFSA is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware, and is duly qualified or licensed to do
business and in good standing under the laws of each jurisdiction where the
performance of, and consummation of the transactions contemplated by, this
Agreement requires it to be so qualified or licensed. AFSA is eligible as a
third party servicer to service ▇▇▇▇▇▇’s loans under the Higher Education
Act and applicable Guarantor Rules and Regulations. |
| |
(ii) |
AFSA has full power and authority under its organizational documents to execute
and deliver this Agreement and to perform its obligations under, and consummate
the transactions contemplated by this Agreement. |
| |
(iii) |
This Agreement has been duly authorized, executed and delivered by AFSA and
constitutes a valid, legal and binding agreement of AFSA, enforceable against it
in accordance with its terms, except to the extent that enforcement maybe
limited by applicable bankruptcy or insolvency laws and by general principles of
equity. Neither the execution, delivery or performance by AFSA of this Agreement
will conflict with or result in a breach or violation of or default under any
of (i) organizational documents of AFSA, (ii) any laws applicable to AFSA
in effect as of the date hereof affecting the Accounts, (iii) any judgment,
order, injunction, award or decree of any court, agency or authority, or (iv)
any contract, instrument, or agreement to which it is a party or may be subject. |
| |
(iv) |
AFSA owns or has the right to use the Services including any databases, output
formats, computer systems, software, know-how, technologies, and processes used
by it to perform its obligations hereunder, and such property does not and will
not infringe upon or violate any patent, copyright, or other proprietary rights
of any third party. |
| |
(v) |
There is no legal action, claim, proceeding, investigation, or controversy
pending or to the best of AFSA’s knowledge threatened against it which
would materially and adversely affect its ability to perform its obligations
under this Agreement. |
Executed as of the day and year first above written.
AFSA DATA CORPORATION
By
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
By
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title ▇▇▇▇▇▇ ▇▇▇▇▇▇, Senior Vice President
COLLEGE LOAN CORPORATION
TRUST I
By its Attorney-in-Fact,
College Loan Corporation
By
/s/ ▇▇▇▇ ▇▇▇▇
Title ▇▇▇▇ ▇▇▇▇, President
EXHIBIT A
ORIGINATION SERVICES
GSL Origination Service consists of the following activities,
applicant notices, and reports.
|
1. |
Open and date stamp incoming mail. |
| |
2. |
Enter manually or electronically all loan, applications data onto the Loan
Origination System. |
| |
3. |
Validation of applications for completeness and accuracy. |
| |
4. |
Attempt to obtain information for incomplete applications by telephone and if
unsuccessful by correspondence. |
| |
5. |
Transmit loans to the Guarantor and receive approved/rejected loans from the
Guarantor. |
| |
6. |
Process loan cancellations. |
| |
7. |
Disburse loan proceeds as scheduled by Lender and/or schools. |
| |
8. |
Convert disbursed loans to the Loan Servicing System. |
| |
9. |
Perform Guarantor reporting on behalf of the Lender and in compliance with the
applicable Guarantor program requirements. |
| |
10. |
Borrower files will be secured and fire protected to the degree it will not
obstruct processing during the Origination process. |
| |
11. |
Respond to telephone and written inquiries from borrowers and schools. |
| |
12. |
All other origination activities required of a lender under the HEA and
Guarantor Regulations within the scope of AFSA’s responsibilities
hereunder. |
In connection with the foregoing origination services. ▇▇▇▇▇▇ authorizes
AFSA to review and approve the loan application on LENDER’S behalf, and where
required by the applicable Guarantor, execute the loan application on ▇▇▇▇▇▇’S behalf
to indicate such approval. Unless otherwise expressly requested by ▇▇▇▇▇▇ in writing to
AFSA, AFSA shall be authorized to approve any loan application on ▇▇▇▇▇▇’S behalf,
which appears to be properly completed, by the borrower and the school, without regard to
the identity of the borrower or the school.
| • |
Validation Incomplete Letter — Requests information from the
borrower that is missing or invalid on their application. |
| • |
Lender Reject Letter — Notifies the borrower that the lender
has rejected their loan application. |
| • |
Disclosure Statement — Loan document produced by the system letter generator and
replaces the state printed disclosure. Disclosure statement printing by AFSA allows full
electronic interface with the Guarantor, enhancing processing time and reducing paper
flow. |
| • |
Loan Cancellation Letter — Notifies the borrower that the lender has
received and processed the borrower’s or school’s request to cancel
their loan. |
| • |
Loan Recovery Letter — Notifies the borrower that the lender has received and
processed their returned disbursement check. |
| • |
Validation Approval Letter — Notifies the applicant that their loan application has
been approved by the lender and Guarantor and their scheduled disbursement date. |
| • |
Other — All other notices required of a lender under the HEA and
Guarantor Regulations within the scope of AFSA’s responsibilities
hereunder. |
| • |
Application Error Report — AFSA internal report used to identify
applications that did not pass the system validation program. Validation is
established using the lenders unique lender policy as well as the loan program
and Guarantor requirements. |
| • |
Disbursement Listing — Report provided to the lender and user as a check roster. This
report provides the lender with accounting entry information. |
| • |
Undisbursed Commitments Report — Provides the lender with detailed information on an
individual loan basis, about undisbursed loan commitments. |
| • |
Undisbursed Funds Analysis — Provides the lender with detailed information on an
individual loan basis, about undisbursed loan commitments. The report can be used as a
tool to provide schools with information about future disbursements to borrowers attending
that institution. |
| • |
Undisbursed Analysis by Date — Provides the lender with detailed information on an
individual loan basis about undisbursed loan commitments. The report can be used as a
tool to provide the lender with cash flow projections to fund their student loans. |
| • |
Validation Acceptance Report — AFSA internal report used to identify
those loans which passed validation. The report displays key data elements to
verify their correct entry. |
| • |
Approved Loan Listing — AFSA internal report which provides evidence
of loan guarantee by the Guarantor. This report enables reduced application
processing time and paper flow. This report allows AFSA full electronic
interface with the Guarantor, enhancing processing time and reducing paper
flow. |
| • |
Application Status Grand Totals — Provides the lender with management information
concerning the total number of applications and corresponding dollar amounts for specific
loan application status. |
| • |
Lender Month End Manifest — Provides the lender with required Guarantor
month end reporting of loan origination activity. The report is used to pay the
lender insurance premium (guarantee) fees. |
| • |
Lender Month End Manifest Detail — Provides the lender with borrower level detail of
transaction activity to support the Lender Month End Manifest. |
ATTACHMENT 1
Consolidation Loan Origination Servicing Goals
AFSA will use best efforts to originate and process Consolidation Loans for
CLC in accordance with the following Servicing Goals:
| * Data Entry |
1 Business Day |
| * Create/Mail LVC's |
1 Business Day |
| * Process LVC's |
12 Business Days--based on prior experience with
Direct Loan Division and other servicers |
| * Disburse/Fund |
2 Business Days--assumes CLC will fund within 24
hours of AFSA requesting funds |
| * Request Guarantees |
3 Business Days |
Notwithstanding the foregoing, the parties acknowledge that AFSA
does not completely control these processes and can only meet the foregoing
servicing goals based on the timely performance of CLC in funding loans and its
other obligations hereunder, and of lenders/holders (other than AFSA) involved
in the origination process.
EXHIBIT B
POST-ORIGINATION SERVICES
At the time of purchase or placement of a loan with AFSA for
servicing, the loan shall be converted and a note examination may be conducted
in accordance to predetermined criteria. The tasks involved in loan conversion
generally include:
| |
Origination and Verification of Account Data
Generation of Receipt of Loans Transferred
Account Package Preparation
Generation of Exceptions Report
Renegotiation of Rejected Accounts
Reconciliation and Balancing
Keypunch Account Data
Microfilm and Microfiche Copies
Run Serialization Crosscheck
Edit and Error Correction
Appropriate Vault Space
Generate Sale Transmittal
Mail Conversion Notification to Borrower
|
Borrower relations begin during In-school Status and continue
throughout the life of the loan. During this period, the Service generally
provides the following printed notices to the borrower and required telephone
contacts:
| |
Introductory Letter
Pre-Grace Statement
Separation Data Change Letters
Disclosure Statement
Phone/Address Verification
Grace Expiration/First Payment Reminder
Student Status Verification (as required)
Skip Trace Locate Letters
Response to Borrower Inquiry Letters
Deferment Processed Notices:
Continuing
Forbearance
Unemployment
Other Deferment
Billing Notices:
Interim Interest Notices
Regular Installment and Past Due Payment Notices
Interim and Payout Demand Notices
Telephone Contacts:
Due Diligence Borrower Calls
Due Diligence Parent/Relative Calls
Skip Tracing Calls
Response to Borrower Inquiry Calls
|
All other activities of this nature required of a lender under the HEA and
Guarantor Regulations within the scope of AFSA’s responsibilities
hereunder.
| 3. |
RELATED LOAN SERVICING ACTIVITIES |
Related loan servicing activities include:
| |
Lock Box Remittance Banking
Payment Processing
Name/Address Updates
Payment Research and Special Handling
Interest Capitalization
Payment Reapplication
Internal Audit of Default Claim
Diligent Skip-Tracing and Pursuit of Payments from Delinquent Borrowers
Claim Preparation and Submission
Reperformance/Renegotiation
|
All other activities of this nature required of a lender under the HEA and
Guarantor Regulations within the scope of AFSA’s responsibilities
hereunder.
Record keeping and accounting are performed as part of the
Service. A series of monthly reports are provided to LENDER regarding the status
of its loans. This reporting includes:
| |
Loans Transferred/Removed Ledger
Student Loan Ledger
Monthly Transaction Report
Accounting Entry Summary Report
Portfolio Summary and Analysis – Characteristics
Portfolio Summary and Analysis – Delinquency
Portfolio Summary and Analysis – Maturity Analysis
Portfolio Summary and Analysis – Reconciliation
Delinquent Report and Summary
Name/Address Report
Paid-in-Full Ledger
Receipt for Loans Transferred
Customer Service Report Card
|
EXHIBIT C
SERVICING FEES
(On File With Lender)
EXHIBIT D
NOTE EXAMINATION ELECTION
▇▇▇▇▇▇ ▇▇▇▇▇▇ makes the following election with respect to any
Note Examination or other document examination to be performed by AFSA in
connection with loan files to be serviced by AFSA hereunder (other than any loans
which may be originated by AFSA for ▇▇▇▇▇▇):
AFSA ENCOURAGES ALL LENDERS TO HAVE A NOTE EXAMINATION PERFORMED
UPON ALL NON-AFSA ORIGINATED FILES TO BE DELIVERED TO AFSA FOR SERVICING,
SO AS TO MINIMIZE TO THE EXTENT POSSIBLE THE LIKELIHOOD OF LOSSES OR OTHER
SERVICING PROBLEMS WHICH MAY RESULT FROM MISSING OR INADEQUATE LOAN
DOCUMENTATION. IF LENDER ELECTS NOT TO HAVE A NOTE EXAMINATION, ▇▇▇▇▇▇ THEREBY
AGREES TO ACCEPT FULL RESPONSIBILITY FOR ANY LOSSES OR SERVICING ERRORS WHICH
RESULT IN WHOLE OR IN PART FROM MISSING OR INADEQUATE LOAN DOCUMENTATION.
NOTWITHSTANDING LENDER’S ELECTION, AFSA’S LIABILITY FOR ANY LOSSES
ARISING FROM ITS FAILURE TO DETECT MISSING, INCOMPLETE, INACCURATE, OR ERRONEOUS
DATA OR DOCUMENTS SHALL BE SUBJECT TO THE LIABILITY LIMITATIONS SPECIFIED IN
SECTIONS 1.F AND 7 OF THE SERVICING AGREEMENT.
| ____ |
FULL NOTE EXAMINATION
If ▇▇▇▇▇▇ has elected Full Note Examination, AFSA agrees to undertake a general
review in accordance with standard industry practice of the loan documentation
listed on note examination checklists to be generated by AFSA and approved by
▇▇▇▇▇▇. By undertaking such review, however, AFSA does not guarantee or assure
the genuineness, accuracy, completeness or compliance of such documentation with
any contract or with applicable law and regulation.
|
| ____ |
ABBREVIATED NOTE EXAMINATION
If ▇▇▇▇▇▇ has elected Abbreviated Note Examination, AFSA agrees to undertake a
general review in accordance with standard industry practice of the loan
documentation listed for the categories of data selected by ▇▇▇▇▇▇ from note
examination checklists to be generated by AFSA and approved by ▇▇▇▇▇▇. By
undertaking such review, however, AFSA does not guarantee or assure the
genuineness, accuracy, completeness or compliance of such documentation with any
contract or with applicable law and regulation. ▇▇▇▇▇▇ acknowledges and agrees
that it shall be responsible for any losses or servicing errors which result in
whole or in part from missing or inadequate loan documentation which might have
been discovered in a Full Note Examination.
|
| ____ |
NO NOTE EXAMINATION
By electing and instructing AFSA not to undertake any Note Examination or other
document examination prior to commencing servicing, ▇▇▇▇▇▇ acknowledges and
agrees that ▇▇▇▇▇▇ assumes the risk and full responsibility for missing or
inadequate loan documentation and for any losses or servicing errors that might
have been avoided had a Full Note Examination been undertaken, and agrees that
AFSA shall not be liable under any circumstances for any such losses or
servicing errors.
|
EXHIBIT E
BLANKET CURE TERMS
The following Blanket Cure Terms shall apply between LENDER and
AFSA when in the course of its servicing, AFSA submits claims to Guarantors
which are rejected by the Guarantor for servicing errors which occurred prior to
AFSA’s servicing or for which AFSA is otherwise not liable under the
Servicing Agreement.
| 1. |
Cure Services for Rejected Account(s) |
| |
A. |
For any Account rejected by the Guarantor in whole or in part because of
servicing error which occurred prior to AFSA’s servicing or for which AFSA
is otherwise not liable under the Servicing Agreement, AFSA and/or an outside
collection agency selected by AFSA will attempt to reinstate the guaranty (cure)
on the Account under the terms and conditions specified below and for the fees
specified herein.
|
| |
B. |
Cure services shall generally include.
|
| |
(1) |
Using best efforts to locate the borrower in the event the borrower’s
address is invalid;
|
| |
(2) |
Upon location, certifying, in a manner acceptable to the Department and the
applicable Guarantor, that the borrower has been located in the event a
“locate cure” is required;
|
| |
(3) |
Performing all written and telephone contacts as required for locate cure by the
Department and the Guarantor necessary to claim file the Account with the
Guarantor; and/or
|
| |
(4) |
Using best efforts to cause the borrower to make one full payment or return a
signed repayment obligation (RO) in the event a “payment or RO cure”
is required.
|
| |
C. |
AFSA will use best efforts to undertake suds cure services within 30 days of
receipt of a rejected Account. If AFSA is unable to cure the Account within an
approximate 45-day period following commencement of cure services, or if AFSA in
its sole judgment determines not to attempt to cure the Account itself, AFSA
will place the Account with a “1st placement” outside collection
agency for a period generally not longer than 180 days. If the “1st
placement” collection agency is unable to cure the Account within the
specified time frame, AFSA will then place the Account with a “2nd
placement” collection agency for a period generally not longer than 270
days. If the “2nd placement” collection agency is unable to cure the
Account within the specified time frame, AFSA will then place the Account with a
“3rd placement” collection agency for a period generally not longer
than an additional 270 days. Following placement with any outside collection
agency, AFSA shall only be responsible for administrative services in
interfacing with such agency on the Accounts involved. AFSA shall not have any
responsibility for training or otherwise supervising the outside collection
agency or its personnel.
|
| |
D. |
For the cure services specified herein, LENDER shall pay to AFSA a fee for each
Account cured as specified in Exhibit E-1. Such fees are subject to adjustment
from time to time upon 30 days’ prior written notice from AFSA to LENDER.
|
| |
E. |
If ▇▇▇▇▇▇ wishes AFSA to arrange on ▇▇▇▇▇▇’s behalf for additional
collection agency services on rejected Accounts for which no cure is
successfully accomplished hereunder, the terms applicable thereto are set forth
in Exhibit E-2. If no Exhibit E-2 is attached, AFSA shall not provide such
services.
|
| 2. |
Limitations on AFSA’s Liability |
| |
▇. |
▇▇▇▇▇▇ acknowledges that in placing Accounts with outside collection agencies,
AFSA is merely providing an administrative service to LENDER. Accordingly, AFSA
does not guarantee the success of its or any outside collection agency’s
cure efforts and shall not otherwise be responsible for the failure of any cure
efforts to reinstate or obtain payment of any Account. AFSA makes no warranties
or representations, expressed or implied, regarding the cure services or the
outside collection agencies used.
|
| |
B. |
Subject to the provisions set forth herein, in the event of any error by AFSA
for which AFSA would be liable under the Servicing Agreement, AFSA shall be
responsible only for reperfommance of any cure activity or erroneous processing
to the extent practicable and necessary without charge to LENDER. With respect
to cure services under this Exhibit, AFSA shall not otherwise be liable for
damages or other monetary relief except in the case of AFSA’s gross
negligence or willful misconduct.
|
| |
C. |
AFSA shall not under any circumstances, regardless of any failure of the
foregoing remedies, be liable for (i) the error or misconduct of any outside
collection agency, or (ii) for losses or damages caused by circumstances or
events beyond AFSA’s reasonable control, or (iii) for any special,
indirect, incidental, punitive, or consequential damages of any nature.
|
The cure services provided for in this Exhibit may be terminated
by either party upon 30 days’ written notice to the other. Termination
shall not affect any payment obligations of the parties arising from services
provided during the term of the Servicing Agreement, or from cures obtained on
Accounts after termination. Following termination, unless otherwise instructed
by LENDER in writing, AFSA shall permit the outside collection agencies to
continue to work any Accounts already placed which such agencies believe will
result in a cure within a reasonable period of time following termination. All
other Accounts shall be recalled from such agencies within 30 days after
termination.
| 4. |
Exclusions and Deconversion |
LENDER hereby gives approval for AFSA to undertake the cure
services outlined in Section 1 of this Exhibit on Accounts with a principal
balance outstanding (PBO) of $500 or greater. Accounts with PBOs less than the
aforementioned amount or Accounts which are not successfully cured within the
time frames described above will be deconverted for the fees specified in the
Servicing Agreement.
| 5. |
Incorporation by Reference |
The terms of the Servicing Agreement are incorporated herein by
reference and shall be applicable to the cure services contemplated by this
Exhibit, to the extent not inconsistent with or contrary to any provision
herein. In the event of any conflict, the terms of this Exhibit shall prevail.
EXHIBIT E-1
CURE FEES
(On File With Lender)
EXHIBIT F
PLUS CREDIT REVIEW SERVICES TERMS
AFSA shall provide the following PLUS Credit Review Services,
subject to all of the terms and conditions of the Servicing Agreement to which
this Exhibit F is attached.
| |
A. |
As used herein the following words shall have the meanings respectively
indicated:
|
“Adverse Credit” or “Adverse Credit history”
means that the credit history of an Applicant reflects any condition or event
which would at the time of such Loan Application disqualify the Applicant from
eligibility for a PLUS Loan under the Higher Education Act or any applicable
Guarantor Regulations. As of the effective date hereof, each of the following is
understood to be a disqualifying Adverse Credit item which will be identified by
AFSA on its credit review reports:
| |
(a) |
any account or debt shown on the Applicant’s credit report is ninety (90)
or more days delinquent as of the date of the credit report; or
|
| |
(b) |
at any time during the five (5) years preceding the date of the credit report,
the Applicant has been the subject of a default determination, bankruptcy
discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off
of a Higher Education Act, Title IV debt.
|
“Applicant” means an individual who has submitted a
Loan Application to LENDER.
“Borrower” means an individual who is the maker or
co-maker of a promissory note and who obtains a PLUS Loan from LENDER in
accordance with the Higher Education Act and any applicable Guarantor
Regulations.
“Educational Institution” means any institution of
postsecondary education which is an “eligible institution” under the
Higher Education Act and is eligible under any applicable Guarantor Regulations.
“Loan Application” means the application for a PLUS
Loan, which application must be executed by a prospective Borrower, certified by
an Educational Institution, and accepted by ▇▇▇▇▇▇.
“PLUS Loan” means a loan made under the Federal PLUS
Program established under the Higher Education Act.
“Servicing Agreement” shall mean the Servicing
Agreement between AFSA and LENDER to which these PLUS Credit Review Services
Terms are attached, or to which they relate.
| |
B. |
Any other capitalized terms used herein shall have to same meanings as set forth
in the Servicing Agreement, unless the context otherwise requires.
|
| 2. |
Credit Review Services |
| |
▇. |
▇▇▇▇ and ▇▇▇▇▇▇ hereby agree to a PLUS credit review services arrangement
whereby—
|
| |
(1) |
▇▇▇▇▇▇ agrees to make PLUS Loans to individuals eligible to be Borrowers
pursuant to the terns of the Higher Education Act and any applicable Guarantor
Regulations;
|
| |
(2) |
AFSA agrees to act as an agent of ▇▇▇▇▇▇ for the receipt, evaluation, handling
and maintenance of certain PLUS Loan credit information on behalf of LENDER, in
order to assist ▇▇▇▇▇▇ in making decisions with respect to the approval or
denial of PLUS Loans consistent with the terms of the Higher Education Act and
any applicable Guarantor Regulations; and
|
| |
(3) |
▇▇▇▇▇▇ makes the final leading decision, in accordance with the procedures
established herein and such credit history appeal processes (relating to credit
report errors or extenuating circumstances) as may be further determined by
▇▇▇▇▇▇.
|
| |
▇. |
▇▇▇▇ agrees to provide the following credit review services on behalf of LENDER:
|
| |
(1) |
Review Loan Applications for information required by credit bureaus for
performing a credit check. In this regard, LENDER shall assure that all Loan
Applications with co-Applicants shall include the social security number of each
Applicant. LENDER or the Educational Institution of the Applicant(s) will be
contacted if additional information is required.
|
| |
(2) |
Generate and submit to a national credit bureau appropriate Applicant
information for the purpose of obtaining credit information for each Applicant.
|
| |
(3) |
Receive and evaluate a credit report from a national credit bureau for each
Applicant. AFSA shall be entitled to rely upon all information furnished to AFSA
by a national credit bureau and shall not be liable or responsible in any manner
for any inaccuracy or error contained in the credit report obtained by AFSA on
▇▇▇▇▇▇’s behalf from a national credit bureau.
|
| |
(4) |
Identify each Applicant for a PLUS Loan who does not have an Adverse
Credit history by generating and providing to LENDER a disbursement report
related to loan origination.
|
| |
(5) |
Identify each Applicant for a PLUS Loan who has an Adverse Credit history by
generating and providing to LENDER a credit review report which:
|
| |
a. |
Lists the name, address, and social security number of each Applicant who has an
Adverse Credit history;
|
| |
b. |
Lists the Adverse Credit factors fount on the Applicant’s credit bureau
report which, absent extraordinary circumstances, require credit denial; and
|
| |
c. |
Provides the name and address of the credit bureau accessed for the Adverse
Credit history information.
|
| |
(6) |
Generate and mail to the Applicant an “adverse action” letter on
behalf of LENDER and in ▇▇▇▇▇▇’s name with respect to each Applicant who
has been identified as having an Adverse Credit history, within 30 days after
AFSA receives a completed Loan Application from LENDER and the credit bureau
report and otherwise comply with the Equal Credit Opportunity Act (ECOA) and
Regulation B thereunder to the extent applicable to AFSA’s services.
|
| |
(7) |
Upon request by ▇▇▇▇▇▇ from time to time, return the original or a copy of each
Loan Application processed by AFSA (other than electronically transmitted Loan
Applications, which will not be transmitted to LENDER) for which an Adverse
Credit history exists, and other information in AFSA’s possession regarding
its review of such Loan Application.
|
| |
(8) |
Maintain accurate books and records of as transactions hereunder, including
Adverse Credit history reports of Applicants processed for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇.
|
| |
▇. |
▇▇▇▇▇▇ agrees that, with respect to all PLUS Loans processed under these PLUS
Credit Review Services Terms, it will:
|
| |
(1) |
Assure that all information set forth in Loan Applications and all other
information provided to AFSA in connection with the performance of its services
hereunder is accurate and complete.
|
| |
(2) |
Be responsible for handling and evaluating all appeals of credit denial.
|
| |
(3) |
Communicate, if appropriate after the credit denial appeal process is completed,
its approval of a Loan Application to AFSA for each Applicant which AFSA
previously identified as possessing an Adverse Credit history by submitting a
letter attached to the Loan Application (or a copy of the Loan Application)
requesting the PLUS Loan to be guaranteed, due to error or other extenuating
circumstances relating to the original credit information obtained by AFSA on
▇▇▇▇▇▇’s behalf, and properly documenting such error correction or other
extenuating circumstances.
|
| |
D. |
Nothing contained in these PLUS Credit Review Services Terms shall make AFSA a
loan production office or a holder or originator of any PLUS Loan, the
application of which has been processed hereunder. ▇▇▇▇▇▇ acknowledges that it
has sole authority and responsibility for the decision to approve or deny
PLUS Loans hereunder.
|
The credit review services contemplated by these PLUS Credit
Review Services Terms shall commence on the date first mentioned above and
continue until the sooner of (i) termination by either ▇▇▇▇▇, with or without
cause, upon not less than thirty (30) days’ written notice to the other
party; or (ii) automatic termination upon the termination or expiration of the
Servicing Agreement.
In performing its PLUS Loan credit review services and other
Loan Application processing functions, AFSA shall only be liable for its own
gross negligence or intentional misconduct. AFSA shall have no responsibility for
the inaccuracy or incompleteness of any Loan Application or credit bureau report
or the information contained thereon, or for any credit decision made by the
Lender. Subject to the foregoing; the provisions of the Servicing Agreement
limiting AFSA’s liability are also hereby incorporated by reference and
shall be binding between the parties hereto with respect to the PLUS Loan credit
review services and other matters contemplated herein.
| 5. |
Incorporation by Reference |
The terms of the Servicing Agreement are incorporated herein by
reference and shall be applicable to the PLUS Loan credit review services, to
the extent not inconsistent with or contrary to any provision herein. In the
event of any conflict, the terms of this Exhibit shall prevail.