EXHIBIT 10.15
[LOGO] Northwest Education Loan Association
AGREEMENT TO GUARANTEE LOANS
This Agreement to Guarantee Loans (the "Agreement"), to be effective the
22/nd/ day of March, 1999, is by and between U.S. BANK NATIONAL ASSOCIATION, AS
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TRUSTEE FOR EDUCATION LOANS, INC. ("Lender"), and NORTHWEST EDUCATION LOAN
ASSOCIATION, a Washington nonprofit corporation ("NELA").
RECITALS
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A. NELA is a private nonprofit guaranty and service agency operating
under the Federal Family Education Loan ("FFEL") Program to provide, promote and
facilitate student loans for the benefit of the citizens and students of
institutions of higher education situated in NELA's area of service.
B. Lender wishes to secure the NELA guarantee on eligible loans made to
students pursuing programs of higher education, and to parents of dependent
undergraduate and graduate students.
C. The FFEL Program includes both the Xxxxxxxx and PLUS Loan Programs.
The PLUS Program requirements vary from the Xxxxxxxx Loan Program requirements
for loans. Variations include different interest rates, different application
procedures and forms, and different terms. PLUS Loans may have parents as co-
maker, both of whom must be eligible as borrowers and both of whom must be
eligible for any deferment or cancellation of repayment obligations.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
promises described below, the parties hereto agree as follows:
1. Applicable Rules, Regulations, and Act. The performance of this
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Agreement is governed by the applicable Rules of NELA, as now existing or
hereafter amended ("Rules"); the applicable Regulations promulgated by the
Secretary of Education ("Secretary"), as now or hereafter amended (34 C.F.R. 668
and 34 C.F.R. 682) ("Regulations"); and Title IV, Part B of the Higher Education
Act of 1965, as now or hereafter amended (20 U.S.C. (S) 1071-1087-2) ("Act").
The Rules, Regulations and Act are hereby incorporated into this Agreement, with
the same force and effect as if they were found in the body of the Agreement
itself.
2. NELA Guarantee. NELA agrees to guarantee loans made, purchased, or
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held by Lender that are eligible for such guarantees. For purposes of this
Agreement, eligibility shall be determined by, and in accordance with, the
Rules, Regulations, and Act. Eligible loans made, purchased, or held after the
effective date of this Agreement, which have been reviewed and approved by NELA
pursuant to the Rules, are guaranteed by NELA. NELA reserves the right, to be
exercised in its sole discretion, to refuse initially to guarantee any loan
prior to the initial disbursement of such loan.
3. Lender's Obligations and General Warranties. With respect to loans
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made or held by Lender, Lender, and any third party conducting loan servicing
activities on behalf of Lender, agree and warrant as follows:
3.1 Lender will use the forms and procedures appropriate to PLUS
and Xxxxxxxx Loans, and will comply with all the Rules, Regulations and
provisions of the Act appropriate to the respective Programs; and
3.2 All actions taken by Lender, including but not limited to making,
servicing or collecting on those loans, are in compliance with the Rules of
NELA, the Regulations, the Act, and all other local, state and federal laws and
regulations for loan servicing, including collection activities.
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4. Warranties Made Upon Assignment of Promissory Note. With respect to
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any promissory note guaranteed by NELA, the Lender hereby agrees and warrants
that upon assignment of such note by Lender to NELA or to any third party:
4.1 The obligations of the borrower(s) and any endorser are valid and
enforceable in accordance with the terms of the note, and not subject to any
defenses;
4.2 All information furnished to NELA in connection with such
promissory note is, in all material respects, true and accurate;
4.3 The promissory note qualifies for insurance under the Federal
Xxxxxxxx Loan Program or the PLUS Program, as applicable;
4.4 The Lender has complied with the applicable provisions of the
Act, Regulations and Rules and all other applicable laws with respect to the
promissory note and the loan;
4.5 The Lender shall indemnify and hold NELA harmless from and
against all losses and expenses, including attorneys' fees or loss of collection
fees incurred by NELA as a result of the assertion against NELA by the borrower
of any claim or defense which could have been asserted against the Lender
whether or not such claim or defense existed at the date of execution of this
contract or the promissory note by the borrower. Upon request by NELA, the
Lender, at its expense, shall undertake or assume the defense of any action in
which any such claim is asserted against NELA; and
4.6 If the note is further assigned by any party, the warranties
made by the Lender upon assignment to NELA shall inure to and benefit all such
assignees including NELA and the federal government.
The obligations of the Lender and rights of NELA or any other third party under
this paragraph are in addition to other obligations of the Lender and rights of
NELA provided for in this Agreement or provided for in any applicable laws,
rules or regulations.
5. Lender's Obligation to Secure Interest Reductions for Borrower.
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Lender acknowledges that pursuant to the Rules, Regulations and Act, Lender is
obligated to assist borrowers under the Xxxxxxxx and the PLUS Loan Programs in
securing reductions in their obligations to pay interest on loans made by Lender
if such interest is eligible for subsidy under the Rules, Regulations, or Act.
6. Amendments.
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6.1 From time to time the federal government may amend the Act, or
the Secretary may amend or repeal any of the Regulations. This Agreement shall
continue in full force and effect, and any such change in the Act or Regulations
shall be incorporated into it, unless a party gives notice of termination of the
Agreement within thirty days of any such change, and specifies the amendment or
repeal of the Act or Regulation as the reason for terminating the Agreement. Any
government action to amend or repeal the Act or Regulations constitutes notice
to the parties of such change, and NELA shall not be responsible for notifying
Lender of any such change.
6.2 From time to time, NELA may amend its Rules which are
incorporated by reference in this Agreement. NELA shall give notice to the
Lender, by certified mail, return receipt requested, of any such amendments.
Lender shall not be bound by any such amendments if it has not received such
notice. If no notice of termination pursuant to Paragraph 8 hereof is received
by NELA from Lender within thirty (30) days of Lender receipt of such notice,
such amendments shall become part of this Agreement.
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7. Term. The initial term of this Agreement shall be from the effective
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date of this Agreement until September 30, 1999. Thereafter, this Agreement
shall be automatically renewed for additional terms of one year, unless NELA or
the Lender gives notice thirty (30) days prior to the end of any term of this
Agreement that the Agreement will not be renewed.
8. Termination. Either party may terminate this agreement.
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8.1 Termination by Lender shall be by thirty (30) days or more
written notice to NELA, specifying the date of termination. Termination by NELA
shall be in conformance with its Rules pertaining to limitation, suspension, and
termination.
8.2 Upon termination, the relationship between NELA and Lender
created by this Agreement shall cease on the termination date except as provided
herein. Termination under this Section 8 or Section 7 will not affect the
guarantee of NELA or the obligations of Lender as to loans guaranteed prior to
the termination date under the Agreement, except in accordance with the Act,
Rules or Regulations. Such guarantees and obligations, including, but not
limited to, the obligation to allow NELA and the Secretary access to records,
shall continue in full force and effect under the terms of the Agreement between
NELA and Lender which was in force at the time each particular loan was made.
9. Breaches.
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9.1 Upon material breach of this Agreement, whether of the
provisions found in the Agreement itself or its incorporated provisions, NELA is
entitled to suspend or withdraw its guarantee, in part or entirely, as to the
loan or loans affected by the breach, provided that NELA has notified Lender of
such breach and Lender has failed to cure such breach within thirty (30) days of
such notice.
9.2 A material breach shall be a defense by NELA to any claim or
action by Lender upon the guarantee of a loan directly affected by the material
breach.
9.3 Upon any breach, whether material or not, of any provision of
this Agreement, including those incorporated by reference, NELA is entitled to
written assurance from Lender that the breach has been remedied.
9.4 The waiver by any party of any breach of any provision of this
Agreement shall not operate or be construed as waiver of any provision as to any
subsequent breach.
10. Severability.
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10.1 This Agreement. If any term, covenant, condition, or
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provision of this Agreement or the application thereof to any person or
circumstance shall, at any time, or to any extent, be determined invalid or
unenforceable, the remaining provisions hereof shall not be affected thereby and
shall be deemed valid and fully enforceable to the extent provided by law.
10.2 Rules, Regulation and Act. If any provision of the Rules,
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Regulations, or the Act are rescinded, repealed, withdrawn, held to be invalid,
or otherwise rendered inoperative, the remaining provisions are not affected,
and continue in full force.
11. Entire Agreement - Modifications. This Agreement, including any
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incorporated provisions, constitutes the entire understanding between the
parties and supersedes any prior written or oral understanding between them.
This Agreement may not be amended, changed, or modified, in whole or in part,
except by an instrument in writing signed by Lender and by NELA or as provided
in Paragraphs 6.1 and 6.2 hereof.
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12. Captions. The captions and headings of the paragraphs of this
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Agreement are for convenience and reference only and may not be used to
interpret or define the provisions hereof.
13. Indemnification. NELA hereby indemnifies and holds Lender harmless
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against any and all liabilities, obligations, losses, damages, penalties,
claims, actions, suits, costs, and expenses (including reasonable attorneys'
fees and expenses), incurred by or asserted against Lender, which arise out of
or relate to the negligent acts or omissions of NELA in performing its
obligations under this Agreement, NELA's violation of the Act and Regulations,
or NELA's failure to comply with its obligations under this Agreement. Lender
hereby indemnifies and holds NELA harmless against any and all liabilities,
obligations, losses, damages, penalties, claims, actions, suits, costs, and
expenses (including reasonable attorneys' fees and expenses), incurred by or
asserted against NELA, which arise out of or relate to the negligent acts or
omissions of Lender in performing its obligations under this Agreement, Lender's
violation of the Act and Regulations, or Lender's failure to comply with its
obligations under this Agreement. This indemnification provision shall survive
any termination of this Agreement.
14. Assignment and Successors. The rights and obligations of NELA under
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this Agreement shall inure to the benefit of and be binding upon its successors
and assigns. The rights and obligations of Lender hereunder are nonassignable
except in accordance with the Rules, Regulations or Act.
15. Notices. Any notice required under this Agreement shall be sufficient
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if in writing and sent by certified or registered mail, postage prepaid, to the
following address:
If to Lender President
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Education Loans Incorporated
000 Xxxxx Xxxxxx XX
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Xxxxxxxx, XX 00000
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If to NELA: Northwest Education Loan Association
000 Xxxxxx Xxxxxxxx
000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Vice President, Program Services
16. Attorneys' Fees. If any dispute arises from the performance or breach
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of any term of this Agreement, whether or not any suit or arbitration proceeding
is commenced, then the prevailing party shall be entitled to its reasonable
attorneys' fees and costs.
17. Governing Law. This Agreement is made and shall be construed and
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performed under the appropriate state laws.
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IN WITNESS WHEREOF, the parties have executed this Agreement in duplicate
on the following dates:
3-23-99 , 1999 U.S. BANK NATIONAL ASSOCIATION, AS
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TRUSTEE FOR EDUCATION LOANS, INC.
By: /s/ Xxxxxx X. Xxxxxx
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(Signature)
Xxxxxx X. Xxxxxx
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(Print or Type Name)
Assistant Vice President
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(Title)
April 2 , 1999 NORTHWEST EDUCATION LOAN
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ASSOCIATION
By: /s/ Xxxxxxxx X. Xxxxxxxx
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Xxxxxxxx X. Xxxxxxxx
Vice President,
Program Services
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