EXHIBIT 10.5
EXHIBIT 10.5
CONFIDENTIAL MATERIALS OMITTED AND FILED
SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.
ASTERISKS DENOTE OMISSIONS.
EXECUTION
4/18/02
NOTE: THIS AGREEMENT CONTAINS CONFIDENTIAL & PROPRIETARY INFORMATION AND MAY
NOT BE DISCLOSED WITHOUT THE CONSENT OF BOTH PARTIES OR AS REQUIRED BY LAW.
AMENDED AND RESTATED GUARANTY AGREEMENT
BETWEEN
THE EDUCATION RESOURCES INSTITUTE, INC.
AND
BANK ONE, NATIONAL ASSOCIATION
This Amended and Restated Guaranty Agreement (this "Agreement") is made
as of the Conversion Date (as defined below), by and between The Education
Resources Institute, Inc. ("XXXX"), a private non-profit corporation organized
under Chapter 180 of the Massachusetts General Laws with its principal place of
business at 000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, and Bank One,
National Association ("Bank One"), a national banking association organized
under the laws of the United States and having its principal place of business
located at 000 Xxxx Xxxxx Xxxxxx, Xxxxxxxx, Xxxx 00000.
WHEREAS, Bank One has established the EDUCATION ONE K-12 Loan Program,
the EDUCATION ONE Continuing Education Loan Program, the EDUCATION ONE
Undergraduate Loan Program, and EDUCATION ONE Graduate Loan Program
(collectively, the "Program") to assist students and parents in financing the
cost of education at private elementary and secondary schools and at various
institutions of higher education; and
WHEREAS, pursuant to agreements between Bank One and The First
Marblehead Corporation ("FMC"), Bank One will originate loans conforming to the
Program ("Loans"); and
WHEREAS, pursuant to such agreements between Bank One and FMC, FMC has
agreed to purchase or to cause to be formed one or more special purpose business
trusts or other entities (each an "SPE") to purchase promissory notes evidencing
Loans following origination; and
WHEREAS, XXXX is in the business of providing financial assistance in
the form of loan guaranties to and on behalf of students enrolled in programs of
education and their parents at XXXX-approved schools; and
WHEREAS, Bank One is willing to make Loans to eligible Borrowers under
the Program, and XXXX is willing to guaranty the payment of principal and
interest against the Borrowers' default or certain other events as more fully
described below, in accordance with the terms and conditions set forth in this
Agreement; and
WHEREAS Bank One and XXXX entered a Guaranty Agreement dated April 30,
2001 ("Old Guaranty Agreement"), and the parties wish to amend and restate the
Old Guaranty Agreement by their entry into this Amended and Restated Guaranty
Agreement to take effect as of the Conversion Date; and
WHEREAS the parties intend that this Amended and Restated Guaranty
Agreement supersedes and replaces the Old Guaranty Agreement in its entirety and
that the guaranty of any and all Loans for applications received under the
Program on or after the Conversion Date, will be made under the terms and
conditions of this Amended and Restated Guaranty Agreement and not under the Old
Guaranty Agreement;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, XXXX and Bank One agree as follows:
Section 1: DEFINITIONS
As used in this Agreement the following terms shall have the following meanings:
1.1 "Agent" shall mean State Street Bank & Trust Company, its successors
and assigns, in its capacity as Agent under the Deposit and Security
Agreement among XXXX, said State Street Bank & Trust Company, Bank One,
and The First Marblehead Corporation, of even date herewith, as
amended.
1.2 "Borrower" shall mean the person, or all persons collectively,
including all students, cosigners, co-borrowers, guarantors, endorsers,
and accommodation parties, who execute a Promissory Note individually
or, in the case of multiple Borrowers, severally and jointly, for the
purpose of obtaining funds from Bank One under the Program.
1.3 "Conversion Date" means the date on which XXXX begins accepting
applications on the new application/promissory note forms attached
hereto for program codes EOP1IM, EOTUDP, EOTUIM, EOTUIO, EOTGDF, and
EOTCDF. That date shall be May 13, 2002, unless XXXX notifies Bank One
in writing prior to May 13, 2002, of a different date, which date shall
in no event be later than May 27, 2002.
1.4 "Due Diligence" shall mean the utilization by Bank One of policies,
practices and procedures in the origination, servicing and collection
of Loans that comply with the standards set forth in the Program
Guidelines and with the requirements of federal and state law and
regulation.
1.5 "Guaranty Event" shall mean any of the following events:
a. failure of the Borrower to make monthly principal and/or
interest payments on a Loan when due, provided such failure
persists for a period of one hundred fifty (150) consecutive
days,
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b. the filing of a petition in bankruptcy with respect to the
Borrower, or
c. the death of the Borrower.
For Loans on which the Borrower is two or more persons, none of the
above, with the exception of paragraph b, is a Guaranty Event unless
one or more such events shall have occurred with respect to all such
persons. The foregoing notwithstanding, if a Borrower files a petition
in bankruptcy pursuant to Chapter 7 of the U.S. Bankruptcy Code and
does not seek a discharge of the affected Loan(s) under 11 U.S.C.
ss.523(a)(8)(B) of the U.S. Bankruptcy Code, Bank One at TERI's request
will withdraw its guaranty claim unless or until one of the other
Guaranty Events shall have occurred with respect thereto.
1.6 "Loan" shall mean a loan of funds, including all disbursements thereof,
made by Bank One under the Program.
1.7 "Note Purchase Agreement" means the amended and restated agreement of
that name between Bank One and FMC dated as of May 1, 2002, as amended
from time to time.
1.8 "Pledged Account" shall mean the account held by the Agent pursuant to
the Deposit and Security Agreement dated April 30, 2001, among XXXX,
FMC, the Agent, and Bank One, as amended.
1.9 "Program Guidelines" shall mean the (i) Underwriting, Origination and
Loan Term Guidelines for EDUCATION ONE K-12 Loan Program, EDUCATION ONE
Undergraduate Loan Program, EDUCATION ONE Graduate Loan Program, and
EDUCATION ONE Continuing Education Loan Program, a copy of which is
attached hereto as Exhibit A; (ii) the XXXX Servicing Guidelines, a
copy of which is attached hereto as Exhibit B; and (iii) the Promissory
Notes, and all changes thereto as provided in Section 7 hereof. The
Program Guidelines are hereby incorporated in this Agreement by
reference and made a part hereof.
1.10 "Promissory Note" shall mean a promissory note executed by a Borrower
evidencing a Loan, on forms in the Program Guidelines attached hereto
or as approved pursuant to Section 3.2 below.
Section 2: GUARANTEE OF LOANS
2.1 XXXX hereby guarantees to Bank One, unconditionally except as set forth
in Section 2.2 below, the payment of 100% of the principal of and
accrued interest on every Loan as to which a Guaranty Event has
occurred. "Accrued interest" shall mean interest accrued and unpaid to
the date of payment in full by XXXX, less any interest that shall have
accrued after the filing of a claim for guaranty payment submitted to
XXXX by Bank One but before XXXX shall have received all the
documentation necessary to process the guaranty claim as set forth in
the Program Guidelines. XXXX will use all reasonable efforts to make
payment on its guaranty within sixty (60) days, and will in any event
make payment within ninety (90) days, of receipt of a demand from Bank
One stating the
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name of the Borrower and the type of Guaranty Event that has occurred
accompanied by the full claim documentation required in the Program
Guidelines.
2.2 TERI's guaranty is conditioned upon the following:
a. Bank One must have filed its claim for guaranty payment within
the time period and following the procedures specified in the
Program Guidelines.
b. Bank One and its predecessors in interest must at all times
have exercised Due Diligence with respect to the Loan (or
shall have cured any failure to exercise Due Diligence under
the reinstatement provisions in Section 2.4 hereof and the
Program Guidelines), and must have complied with all other
material requirements of the Program Guidelines applicable to
the Loan.
c. Bank One shall have paid to XXXX the Initial Guaranty Fee (as
defined in Section 3.3.a below) for the Loan in question, and
shall have paid to the Agent, either directly or through its
origination agent, any Subsequent Guaranty Fee (as defined in
Section 3.3.b below) for the Loan in question which is due and
payable as provided in Section 3.3.b below.
d. XXXX must have received from Bank One the original Promissory
Note, or a lost note affidavit or other acceptable and
admissible evidence of the Loan, enforceable against the
Borrower (except as provided in this Section 2.2(d) and in
Section 2.3 below), endorsed to XXXX in such manner as to
transfer to XXXX all rights in and title to such Promissory
Note and Loan, and to Bank One's knowledge free and clear of
all liens and encumbrances, and of all defenses,
counterclaims, offsets, and rights of rescission that might be
raised by the Borrower. Submission of a claim to XXXX shall
constitute Bank One's certification that the conditions of
2.2.b. and 2.2.d. have been met, and XXXX is entitled to rely
on such certification.
Subsections 2.2.b. and 2.2.d above notwithstanding, if a Loan submitted
for guaranty was originated by XXXX on behalf of Bank One pursuant to a
Loan Origination Agreement between the parties, (i) XXXX will not deny
Bank One's guaranty claim on such Loan to the extent the basis for
denial is a violation of the Program Guidelines, a violation of
Massachusetts or federal law committed by XXXX in the origination
process, or a violation of other law that would have been avoided had
XXXX followed procedures for compliance with such law stipulated by
Bank One pursuant to Section 8(b) of the Loan Origination Agreement,
and (ii) XXXX will have no recourse against Bank One in the event that
TERI's actions or omissions in the origination process (other than (A)
its use of certain forms to comply with law other Massachusetts or
federal law, or (B) actions or omissions stipulated by Bank One
pursuant to said Section 8(b) of the Loan Origination Agreement), shall
have given rise to a defense in favor of the Borrower in a suit on the
Promissory Note or Loan.
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2.3 TERI's guaranty obligation with respect to any Loan shall not be
terminated or otherwise affected or impaired (i) by Bank One's granting
an extension to the Borrower of time to make scheduled payments, or by
any other indulgence Bank One may grant to the Borrower, provided that
all extensions and other indulgences meet the forbearance standards and
other requirements of the Program Guidelines; or, Section 2.2.d above
notwithstanding, (ii) because of any fraud in the execution of the
Promissory Note, (iii) because of any illegal or improper acts of the
Borrower, (iv) because the Borrower may be relieved of liability for
such Loan due to lack of contractual capacity or any other statutory
exemption.
2.4 If XXXX properly denies Bank One's claim on any Loan on the grounds of
Due Diligence deficiencies, Bank One may thereafter require that XXXX
reinstate the guaranty of such Loan if (a) Bank One corrects such
deficiencies and receives three (3) consecutive full on-time monthly
payments from the Borrower, according to any schedule permitted by the
Program Guidelines, and if at the time of Bank One's request the
Borrower is within sixty (60) days of being current on all principal
and interest payments on such Loan, or (b) Bank One satisfies any other
method of cure set forth in the Program Guidelines.
2.5 TERI's guaranty hereunder is a continuing and absolute guaranty of
payment and not merely of collection, covering Loans made in accordance
herewith either (i) prior to termination of this Agreement, or (ii)
based upon applications received by Bank One prior to such termination;
and shall not affect TERI's obligations to Bank One then existing,
whether direct or indirect, absolute or contingent, then due or
thereafter to become due.
2.6 XXXX agrees not to exercise any right of subrogation, reimbursement,
indemnity, contribution or the like against the Borrower of any Loan
unless and until all TERI's obligations under this Agreement with
respect to such Loan have been satisfied in full, except to the extent
that it is deemed a valid claimant as a contingent creditor, for
example, under Title 11 of the United States Code (the "Bankruptcy
Code"), or applicable state law.
2.7 During the term of this Agreement, XXXX agrees to adhere to Bank One
Information Security Standards attached hereto as Exhibit E.
Notwithstanding any other provision of this Agreement, XXXX shall
permit Bank One to audit its operations for compliance with the
Information Security Standards, upon reasonable notice from Bank One.
2.8 XXXX will permit Bank One, any duly designated representative of Bank
One, or any governmental body having jurisdiction over Bank One
(subject to written notice being provided to XXXX by Bank One
identifying the requesting party and the date of the review), to
examine and audit TERI's books and records, systems, controls,
processes and procedures related to the Loans, at any time during
TERI's regular business hours, provided that in the case of
examinations by Bank One or its representative absent good cause (i)
XXXX must be given ten (3) business days' prior written notice and,
(ii) no more than two such audits may be conducted with respect to any
twelve-month period or will take place in any twelve-month period. In
no event will any audit be performed during
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July, August, September, or October in any year except at the request
of a regulatory authority having jurisdiction over Bank One. Regulatory
agencies can have access to TERI's books and records, systems,
controls, processes and procedures when they deem necessary without
prior notice. XXXX will also provide Bank One with a copy of its
audited financial statement or other third party audits within ten (10)
days of same becoming available. Notwithstanding any other provision of
this Agreement, XXXX shall permit Bank One to audit its operations for
compliance with the Information Security Standards, upon reasonable
notice from Bank One.
2.9 If XXXX should violate any material term of this Agreement, it will be
liable to Bank One for all loss, cost, damage, and expense sustained by
Bank One as a result. XXXX will indemnify Bank One and hold it harmless
from and against any loss, cost, damage and expense that Bank One may
suffer as a result of claims arising out of TERI's actions or omissions
relative to Bank One's participation in the Program. "Expense"
includes, without limitation, Bank One's reasonable attorney's fees.
XXXX will further indemnify Bank One and hold it harmless from and
against any claim brought against Bank One by any Borrower or third
party based on actions or omissions of Bank One that were consistent
with the Program Guidelines. The foregoing notwithstanding, XXXX will
not be liable to Bank One under any provision of this Agreement for
special or consequential damages including but not limited to lost
profits, even if advised in advance of the possibility of such damages,
or for exemplary or punitive damages, provided that such exclusions
shall not apply to the indemnification against an award of such damages
pursuant to a third party claim.
2.10 Although Bank One agrees not to use any loan servicer not approved by
XXXX, Bank One acknowledges that TERI's approval of a servicer is in no
way an endorsement of such servicer and that XXXX shall have no
liability to Bank One for any losses arising from such servicer's
failure to comply with Due Diligence or the Program Guidelines or
applicable law, nor shall XXXX be required to honor any claim submitted
by such servicer if the claim does not comply with the requirements of
this Agreement.
2.11. This Amended and Restated Guaranty Agreement supersedes and replaces
the Old Guaranty Agreement and all amendments thereto in their entirety
and the guaranty of any Loans for which applications are received on or
after the Conversion Date will be made under the terms and conditions
of this Amended and Restated Guaranty Agreement and not under the Old
Guaranty Agreement; provided, however, that the Third Amendment to
Program Agreements, dated November 1, 2001, remains in full force and
effect. The Old Guaranty Agreement shall continue to govern the
guaranty of Loans for which applications are received prior to the
Conversion Date.
Section 3: OBLIGATIONS OF THE LENDER
3.1 In originating, servicing, disbursing, and collecting Loans, Bank One
will comply, and cause its servicer and others acting on its behalf to
comply with all applicable requirements of federal and state laws and
regulations.
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3.2 Bank One will use Promissory Notes, Loan applications, disclosure
statements, and other forms to which the parties may agree from time to
time in written, faxed, or e-mailed communications or documents. The
forms of application and Promissory Note attached as part of the
Program Guidelines, and the form of disclosure statement attached
hereto as part of the Program Guidelines, are agreed to be satisfactory
to both parties. Without limiting the generality of Section 3.1, Bank
One warrants the conformity of such instruments and any agreed
successors thereto with all applicable and material legal requirements,
other than those of federal and Massachusetts law and regulation.
3.3 Bank One will pay a guaranty fee for each Loan (the "Guaranty Fee") as
follows:
a. At the time of each disbursement of the Loan, Bank One will
promptly remit to XXXX [**] percent ([**]%) of the principal
amount of Loan disbursed (the "Initial Guaranty Fee").
b. At such times as are set forth in Schedule 3.3 attached hereto
and incorporated herein by reference, Bank One will remit to
the Agent, or cause XXXX as originating agent to remit to the
Agent, for deposit in the Pledged Account, such additional
fees as are set forth in Schedule 3.3 ("Subsequent Guaranty
Fee"). In the event that a Guaranty claim is made with respect
to a Loan before a Subsequent Guaranty Fee is scheduled to be
paid by Bank One, for such Loan, the Subsequent Guaranty Fee
shall become immediately due and payable. In the event that a
loan is prepaid in full prior to the date that a Subsequent
Guaranty Fee is scheduled to be paid Bank One for such Loan,
the Subsequent Guaranty Fee shall nevertheless become due and
payable at the time that would have applied if such prepayment
had not occurred. For example, if a Subsequent Guaranty Fee is
due at the time of a Securitization Transaction and a Loan is
prepaid before it is eligible for Securitization, then the
Subsequent Guaranty Fee with respect to such Loan shall become
due at the first Securitization Transaction when such Loan
would have been eligible for inclusion, had prepayment not
occurred.
c. Anything in the Program Guidelines to the contrary
notwithstanding, if Bank One is required under the terms of a
Promissory Note to refund all or part of the fees collected
from the Borrower, all or part of which are used to pay the
Guaranty Fee, to a Borrower, XXXX will refund all or part of
the Initial Guaranty Fee and the Agent will refund all or part
of any Subsequent Guaranty Fee it has received to Bank One
upon being so advised in writing.
Failure to remit a Guaranty Fee within thirty (30) days of the time set
forth above will not be a breach of this Agreement but will vitiate
TERI's guaranty of the Loan concerned.
3.4 If XXXX shall have purchased a Loan due to the occurrence or alleged
occurrence of a Guaranty Event described in Section 1.5.a and/or 1.5.b
above, Bank One will promptly repurchase such Loan from XXXX, (i) if
XXXX succeeds, after purchase, in obtaining from the Borrower three
full consecutive on-time monthly payments, according to any schedule
permitted by the Program Guidelines, provided that on the date of
TERI's notice
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to repurchase, the Borrower is within thirty (30) days of being current
on his or her payments on such Loan; provided that this repurchase
obligation may be invoked by XXXX only once as to any Loan; or (ii)
subject to Section 2.3 and the last sentence of 2.2 above, if XXXX
should determine that the Loan does not meet the conditions set forth
in subsections (b), (c) and (d) of Section 2.2 above.
3.5 All to the extent permitted by applicable law, Bank One will deliver to
XXXX such reports, documents, and other information concerning the
Loans as Bank One receives from XXXX in its capacity as originator of
the Loan and from the Servicer and permit independent auditors or
authorized representatives of XXXX, and permit governmental agencies,
if any, having regulatory authority over XXXX, to have access to the
operational and financial records and procedures directly applicable to
Loans and to Bank One's participation in the Program.
3.6 If Bank One should violate any material term of this Agreement, it will
be liable to XXXX for all loss, cost, damage, and expense sustained by
XXXX as a result. Bank One will indemnify XXXX and hold it harmless
from and against all loss, cost, damage, and expense that XXXX may
suffer as a result of claims arising out of Bank One's actions or
omissions relative to Bank One's participation in the Program unless
such actions or omissions are in compliance with this Agreement. Bank
One will similarly indemnify XXXX with respect to any defenses arising
from Bank One's violation of or failure to comply with any material
law, regulation, or order, or any term of this Agreement, that may be
raised by a Borrower to any suit upon a Promissory Note or Loan.
"Expense" includes, without limitation, TERI's reasonable attorney's
fees. The foregoing notwithstanding, Bank One will not be liable to
XXXX under any provision of this Agreement for special or consequential
damages including but not limited to lost profits, even if advised in
advance of the possibility of such damages, or for exemplary or
punitive damages, provided that such exclusions shall not apply to the
indemnification against an award of such damages pursuant to a third
party claim.
Section 4: INTENTIONALLY OMITTED
Section 5: REPRESENTATIONS AND WARRANTIES
5.1 Each party represents and warrants to the other that its execution,
delivery and performance of this Agreement are within its power and
authority, have been authorized by proper proceedings, and do not and
will not contravene any provision of law or such party's organization
documents or by-laws or contravene any provision of, or constitute an
event of default or an event which, with the lapse of time or with the
giving of notice or both, would constitute an event of default, under
any other agreement, instrument or undertaking by which such party is
bound. Each party represents and warrants that it has and will maintain
in full force and effect all licenses required under applicable state,
federal, local or other law for the conduct of all activities
contemplated by this Agreement and comply with all requirements of such
applicable law relative to its licenses and the conduct of all
activities contemplated by this Agreement. This Agreement and all of
its terms and provisions are and shall remain the legal and binding
8
obligation of the parties, enforceable in accordance with its terms
subject to bankruptcy and insolvency laws. The warranties given herein
shall survive any termination of this Agreement.
5.2 The parties acknowledge that XXXX is not an insurer or reinsurer and
Bank One expressly waives all claims it might otherwise have under
applicable law were XXXX to be held by any court or regulatory agency
to be acting as an insurer or reinsurer hereunder. The only obligations
of XXXX to Bank One shall be those expressly set forth herein.
Section 6: MISCELLANEOUS
6.1 Neither party is or will hold itself out to be the agent, partner, or
joint venturer of the other party with regard to any transaction under
or pursuant to this Agreement.
6.2 Each party's respective rights, remedies, powers, privileges, and
discretions ("Rights and Remedies") shall be cumulative and not
exclusive. No delay or omission by either party in exercising or
enforcing any of its Rights and Remedies shall operate as to constitute
a waiver of them. No waiver by a party of any default under this
Agreement shall operate as a waiver of any subsequent or other default
under this Agreement. No single or partial exercise by a party of any
of its Rights and Remedies shall preclude the other or further exercise
of such Rights and Remedies. No waiver or modification by a party of
the Rights and Remedies on any one occasion shall be deemed a
continuing waiver. A party may exercise its various Rights and Remedies
at such time or times and in such order of preference as it in its sole
discretion may determine.
6.3 This Agreement represents the entire understanding of the parties with
respect to the subject matter hereof. This Agreement, together with any
contemporaneous contract concerning credit analysis or other loan
origination functions, supersedes all prior communications whatsoever
between the parties relative in any way to Loans or Bank One's
participation in the Program. This Agreement may be modified only by
written agreement of the parties hereto, except as may otherwise be set
forth herein.
6.4 Any determination that any provision of this Agreement is invalid,
illegal, or unenforceable in any respect shall not affect the validity,
legality, or enforceability of such provision in any other instance and
shall not affect the validity, legality, or enforceability of any other
provision of this Agreement.
6.5 Throughout the term of this Agreement, XXXX shall maintain a disaster
recovery plan and the capacity to execute such plan. On an annual
basis, and upon request by Bank One, XXXX shall provide Bank One with
an executive summary of TERI's most current disaster recovery plan and
a detailed description of the disaster recovery plan test results. Upon
the occurrence of any disaster requiring use of TERI's disaster
recovery plan, XXXX shall promptly notify Bank One of same, and XXXX
shall provide to Bank One equal access as TERI's other customers in the
provision of the Services contemplated by this Agreement. Bank One
shall forward to XXXX a copy of any disaster recovery plan provided to
Bank One by the servicer or any notice of the occurrence of a disaster
by the
9
servicer, consistent with the permission granted in the agreement
between Bank One and the servicer to provide such information to XXXX.
Subject to the foregoing, no party hereto shall be responsible for, or
in breach of this Agreement if it is unable to perform as a result of
delays or failures due to any cause beyond its control, howsoever
arising, and not due to its own act or negligence and that cannot be
overcome by the exercise of due diligence. Such causes shall include,
but not be limited to, labor disturbances, riots, fires, earthquakes,
floods, storms, lightning, epidemics, wars, civil disorder,
hostilities, expropriation or confiscation of property, failure or
delay by carriers, interference by civil and military authorities
whether by legal proceeding or in fact and whether purporting to act
under some constitution, decree, law or otherwise, acts of God and
perils of the sea.
6.6 This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without regard to the conflict of
laws provisions thereof.
6.7 This Agreement will be binding on the parties' respective successors
and assigns. It may not be assigned by either party without the other's
written consent, which will not be unreasonably withheld, provided
that: (a) Bank One may assign any Loan, together with the provisions
hereof as applicable to such Loan, to FMC or any SPE; and (b) XXXX may
sub-contract any administrative obligations necessary or convenient to
XXXX to perform its obligations hereunder to FMC or any subsidiary or
affiliate of FMC, so long as such sub-contractor shall be obligated to
comply with this Agreement and so long as XXXX is not relieved of any
obligation as result of the sub-contracting; and (c) Bank One may
assign its rights and obligations under this Agreement to any of its
Affiliates that is a national banking association or state-chartered
bank having the legal power and right under applicable law (including,
without limitation, usury law in the State where it is located) to make
educational loans conforming to the Program Guidelines to borrowers
located in all states and territories of the United States.
6.8 Notice for any purpose hereunder may be given by any means requiring
receipt signature, or by facsimile transmission confirmed by first
class mail.
6.9 Notice for any purpose hereunder may be given by any means requiring
receipt signature, or by facsimile transmission confirmed by first
class mail. In the case of XXXX, notices should be sent to its
President, and if by fax, to (000) 000-0000, or to its Senior Vice
President-Loan Programs, Fax No. (000) 000-0000. In the case of Bank
One, notices should be sent to the following:
Bank One, N.A.
Xxxx Xxxxx Xxxxx
Vice President
0000 Xxxxxxxx Xxxxxxx
XX0-0000
Xxxxxxxx, XX 00000
Fax No.: 000 000-0000
With a copy to:
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Education One Group
00000 XXX Xxxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxx
Fax No.: 000-000-0000
Either party may from time to time change the person, address or fax
number for notice purposes by formal notice to the other party.
6.10 The name of EDUCATION ONE and the loan product designated as EDUCATION
ONE shall at all times be the sole property of Bank One, subject to any
license granted by Bank One, and XXXX shall acquire no interest in such
name by virtue of this Agreement. During the term of this Agreement,
however, Bank One shall use the EDUCATION ONE trademark and service
xxxx only for Loans guaranteed hereunder.
6.11 This Agreement contains the entire understanding of the parties
relating to this subject matter. It will be binding on and inure to the
benefit of the parties' respective successors and assigns, provided
that it may not be assigned by either party without the other's prior
consent. Bank One may assign its interests in this Agreement (i) as it
concerns any Loan originated hereunder, to any entity to which it
assigns such Loan permissibly under the Guaranty Agreement, or (ii) to
any of its affiliates or subsidiaries without consent; however, Bank
One must notify XXXX, in writing, of the assignment at least thirty
days prior to the transfer.
6.12 XXXX recognizes and hereby expressly agrees that this Agreement in no
way prohibits Bank One from making education loans not guaranteed
hereunder so long as, during the term of this Agreement, such loans are
not marketed or made under the EDUCATION ONE trademark and service
xxxx. Subject to such trademark and service xxxx restriction, Bank One
retains the ability to contact, negotiate terms with, and enter into
contracts with any other third party, including any competitor of XXXX,
at any time, without notice to XXXX, and without incurring liability
therefor.
6.13 Each party's respective rights, remedies, powers, privileges, and
discretion's ("Rights and Remedies") will be cumulative and not
exclusive. No delay or omission by either party in exercising or
enforcing any of its Rights and Remedies will operate as or constitute
a waiver of them. No waiver by a party of any default under this
Agreement will operate as a waiver of any subsequent or other default
under this Agreement. No single or partial exercise by a party of any
of its Rights and Remedies will preclude the other or further exercise
of such Rights and Remedies. No waiver or modification by a party of
the Rights and Remedies on any one occasion will be deemed a continuing
waiver. A party may exercise its various Rights and Remedies at such
time or times and in such order of preference as it in its sole
discretion may determine.
6.14 This Agreement may be modified only by written agreement of the parties
hereto, except as may otherwise be set forth herein.
11
6.15 If any provision of this Agreement is declared or found to be illegal,
unenforceable or void, then both parties shall be relieved of all
obligations arising under such provision, but only to the extent that
such provision is illegal, unenforceable or void, it being the intent
and agreement of the parties that this Agreement shall be deemed
amended by modifying such provision to the extent necessary to make it
legal and enforceable while preserving its intent or, if that is not
possible, by substituting therefor another provision that is legal and
enforceable and achieves the same objective.
6.16 Should XXXX outsource or subcontract some or all of its administrative
functions, no such outsourcing or subcontracting shall relieve XXXX of
it obligations under this Agreement. XXXX will advise Bank One in
writing of any outsourcing or subcontracting that would alter the
manner in which, or the person(s) to whom, communications concerning
originations should be made.
6.17 XXXX shall not use any trade name, trademark, service xxxx, or any
other information which identifies Bank One or EDUCATION ONE in TERI's
sales, marketing, publicity activities, including but not limited to,
interview with representatives of any written publication, television
station or network, or radio station or network, without the prior
written consent of Bank One Corporate Communication Department or a
designated agent of Bank One.
Section 7: CHANGES TO PROGRAM GUIDELINES
The parties agree that the Program Guidelines will need to be updated and
modified to respond to changed conditions from time to time. The parties intend
to make such modifications in a manner that does not interfere with the ordinary
advertising and origination cycle for education loans. Amendments necessary to
meet state or federal regulatory requirements may be made at any time. With
respect to all other changes, the parties shall exchange requests for
modification of the Program Guidelines, including without limitation any
requested changes to the provisions of the Program Guidelines concerning the
Guaranty Fees, in the first part of the first calendar quarter of each year.
Each party shall respond in writing to proposals from the other within 30 days,
in writing, and both parties will attempt to resolve any differences within 30
days after receiving a response to a request. All modifications must be mutually
acceptable. Any modifications approved by the parties and not requiring system
adjustments by Bank One's loan servicer shall take effect within thirty (30)
days after approval. Modifications requiring system adjustments by Bank One's
loan servicer shall take effect as soon after approval as such servicer shall be
able to adjust its systems to accept loans made on the modified terms. The
parties shall use their best efforts to conclude all negotiations of proposed
changes prior to May 1 of each year. The foregoing process shall not apply to
modification of the Servicing Guidelines, which are subject to a modification
process contained therein. Notwithstanding the foregoing, with respect to
modification of note forms, applications, and related materials for prescreened
marketing or other marketing campaigns, the parties may agree to supplemental
forms and procedures as often as they desire. Upon approval of such forms in
writing (which may include a fax or an email) by Bank One such additional forms
and procedures shall be subject to the representation and warranty contained in
Section 3.2 of this Agreement.
12
Section 8: TERM AND TERMINATION
8.1 The initial term of this Agreement shall commence on the Conversion
Date, and shall continue through April 30, 2004. Thereafter, this
Agreement shall automatically renew for successive two-year terms
unless either party provides written notice of non-renewal and
termination not less than ninety (90) days prior to the end of the
then-current term.
8.2 In the event that the parties are unable to agree on a proposed
modification to the Program Guidelines as provided in Section 7, above,
the party proposing the modification shall have the option of
terminating this Agreement by providing written notice of termination
to the other party. Such termination will be effective on the following
May 1.
8.3 To the extent permitted by applicable law, if either party should
become subject to bankruptcy, receivership, or other proceedings
affecting the rights of its creditors generally, this Agreement will be
deemed terminated thereupon immediately without the need of notice from
the other party, and the party becoming subject to such proceedings
will promptly notify the other party thereof.
8.4 Any controversy or claim between the parties arising from or in
connection with this Agreement or the relationship of the parties under
this Agreement whether based on contract, tort, common law, equity,
statute, regulation, order or otherwise, and whether arising before or
after the termination of this Agreement ("Dispute") shall be resolved
as follows:
(1) Upon written request of either party, the parties will
each appoint a designated representative whose task it will be to meet
for the purpose of endeavoring to resolve such Dispute.
(2) The designated representatives shall meet as often as the
parties reasonably deem necessary to discuss the problem in an effort
to resolve the Dispute without the necessity of any formal proceeding.
(3) Arbitration proceedings for the resolution of a Dispute
may not be commenced until the earlier of (i) when the designated
representatives conclude in good faith that amicable resolution through
continued negotiation of the matter does not appear likely; or (ii) the
expiration of the thirty (30) day period immediately following the
initial request to negotiate the Dispute.
8.5 The parties acknowledge that this Agreement evidences a transaction
involving interstate commerce. Any controversy or claim arising out of
or relating to this Agreement, or the breach of the same, shall be
settled through consultation and negotiation in good faith and a spirit
of mutual cooperation under Section 8.4. However, if those attempts
fail, the parties agree that any misunderstandings or disputes arising
from this Agreement shall be decided by binding arbitration which shall
be conducted, upon request by either party, in New York, New York,
before one (1) arbitrator designated by the American Arbitration
Association (the "AAA"), in accordance with the terms of the Commercial
Arbitration Rules of the AAA, and, to the maximum extent applicable,
the United States Arbitration Act (Title 9 of the United States Code).
The arbitrator shall be required to make detailed
13
findings of fact and conclusions of law. Notwithstanding anything
herein to the contrary, either party may proceed to a court of
competent jurisdiction to obtain equitable relief at any time.
8.6 If either party is in breach hereof, the other may terminate this
agreement upon thirty (30) days' written notice, unless the breach is
cured within that thirty-day period. If the breach is governed by
Section 6.5 herein ("Force Majeure"), the 30-day cure period will be
extended day-for-day by the number of days, not to exceed 60, that the
party is prevented from performing by circumstances beyond its
reasonable control.
8.7 Termination shall be prospective only and shall not affect the
obligations of the parties hereto, which were incurred prior to such
termination or any of the warranties and indemnities contained herein
or the provisions of Section 9 below (regarding confidentiality). In no
event shall Bank One be entitled to xxx for specific performance of
this Agreement by XXXX with respect to the guaranty of Loans other than
those as to which a binding commitment shall have been made prior to
the sending of notice of termination of this Agreement.
Section 9: CONFIDENTIALITY; RESTRICTIONS ON USE OF INFORMATION
9.1 XXXX and Bank One each acknowledge that in the course of the operations
contemplated by this Agreement, and in the course of communications
relative to this Agreement, it has received and will receive
information concerning the other's finances, business plans, business
methods, and the like that is not generally known in the student loan
industry ("Confidential Information"). Each party will respect and use
all reasonable efforts to maintain the confidentiality of the other's
Confidential Information unless and until such information becomes
generally known through no fault of the receiving party. Without
limiting the foregoing, XXXX may disclose any of Bank One's
Confidential Information to any entity to which XXXX subcontracts its
obligations under this Agreement pursuant to Section 6.7(b) hereof.
9.2 In accordance with the provisions of Title V of the Xxxxx-Xxxxx-Xxxxxx
Act (the "GLB Act") and Federal Reserve Board Regulation P ("Regulation
P"), XXXX agrees to respect and protect the security and
confidentiality of any "nonpublic personal information" (as defined in
the GLB Act and Regulation P) relating to applicants for Loans and to
Borrowers, including, where applicable, the restrictions on the re-use
and disclosure of such information set forth in the GLB Act and
Regulation P.
9.3 Without limiting the foregoing, XXXX may retain as its own property and
use for any lawful purpose any or all aggregated or de-identified data
concerning Loan applicants and Borrowers which does not include the
name, address or social security number of the Loan applicants or
Borrowers. XXXX may sell, assign, transfer or disclose such information
to third parties including, without limitation, FMC, who may also use
such information for any lawful purpose.
14
9.4 Both XXXX and Bank One have made and will continue throughout the term
of this Agreement to make available to the other party confidential and
proprietary materials and information ("Proprietary Information").
Prospectively, each party shall advise the other of material and
information that is confidential and/or proprietary. All material and
information provided by either party to the other relating to the
business, policies, procedures, customs, forms, customers and
strategies of the providing party or any of its affiliates, including
information previously divulged or delivered to the other party
regarding the aforementioned subject matter is hereby designated as
confidential and proprietary and shall be considered to be Proprietary
Information. It is understood that the obligations set forth in this
Section do not apply to materials or information that: (i) are already,
or otherwise become, generally known by third parties as a result of no
act or omission of the receiving party; (ii) subsequent to disclosure
hereunder are lawfully received from a third party having the right to
disseminate the information without restriction on disclosure; (iii)
are generally furnished to others by the disclosing party without
restriction on disclosure; (iv) were already known by the receiving
party prior to receiving them from the disclosing party and were not
received from a third party in breach of that third party's obligations
of confidentiality; or (v) are independently developed by the receiving
party without the use of Proprietary Information of the disclosing
party.
9.5 Each party shall maintain the confidentiality of the other party's
Proprietary Information and will not use or disclose such Proprietary
Information without the prior written consent of the other party.
Notwithstanding the foregoing, either party may disclose the other's
Proprietary Information to its affiliates, agents, and other third
parties on a need-to-know basis, provided that such parties are under a
similar obligation to maintain the confidentiality of such Proprietary
Information.
9.6 Further, each party may disclose the other's Proprietary Information in
a judicial or quasi-judicial proceeding when required to do so by law
when responding to a subpoena, deposition notice or similar judicial or
governmental demand; in such situations, however, the party being
requested to disclose the other's Proprietary Information shall
endeavor to provide notice to the other party whereby the other party
may intervene in the proceeding, if it wishes, and endeavor to prevent
such disclosure. Additionally, each party may disclose the other's
Proprietary Information to the various regulatory agencies having
jurisdiction over the disclosing party.
9.7 Notwithstanding any contrary provision of this Agreement, as long as
each party protects the Proprietary Information of the other, neither
the exposure to the other party's Proprietary Information, nor its
ownership of work products, shall prevent either party from using
ideas, concepts, expressions, know-how, skills and experience possessed
by either party prior to its association with the other party or
developed by either party during its association with the other party,
so long as the Proprietary Information of the other party is not used.
9.8 All capitalized terms used in this subsection and not otherwise defined
shall have the meanings set forth in the Federal "Privacy of Consumer
Financial Information" Regulation (12 CFR Part 40), as amended from
time to time (the "Privacy Regulation"),
15
issued pursuant to Section 504 of the Xxxxx-Xxxxx-Xxxxxx Act (15 U.S.C.
6801 et seq.). The parties acknowledge that the Privacy Regulation
governs disclosures of nonpublic personal information about consumers.
a. XXXX hereby represents and warrants as follows with
respect to any Nonpublic Personal Information
released to XXXX by Bank One
(A) XXXX controls access to the network on which any
such Nonpublic Personal Information is stored,
through the compliance with and utilization of its
information security measures which restrict access;
and
(B) TERI's information security measures are
consistent with Bank One's Information Security
Standards, a copy of which are attached hereto as
Exhibit E.
b. XXXX hereby agrees that it shall:
(A) Comply with the terms and provisions of the
Privacy Regulation, including, without limitation,
the provisions regarding the sharing of Nonpublic
Personal Information (as defined in the Privacy
Regulation);
(B) Not disclose or use any Nonpublic Personal
Information that it obtains from Bank One except to
carry out the purposes for which Bank One provided
such Nonpublic Personal Information, or as otherwise
permitted by the Privacy Regulation and other
applicable laws;
(C) Comply with Bank One's Information Security
Standards;
(D) Not make any changes to its security measures
that would increase the risk of an unauthorized
access; and
(E) Not disclose any Nonpublic Personal Information
disclosed to XXXX by Bank One to any other entity,
except as follows:
(1) To Bank One's Affiliates, with the
prior consent of Bank One.
(2) To TERI's affiliates, provided, that
its affiliates may, in turn, disclose
and use the information only to the
extent that XXXX may disclose and use
the information;
(3) To an unaffiliated third party, in the
ordinary course of business in order
to carry out the activity for which
the information was disclosed to XXXX
pursuant to one of the following
exceptions to the Privacy Regulation:
(i) as necessary to effect, administer
or enforce a transaction that a
consumer requests or authorizes;
(ii) in connection with servicing or
processing a financial product or
service that a consumer requests or
authorizes, or maintaining or
servicing the consumer's account with
Bank One;
(iii) with the consent or at the
direction of the consumer; or
(iv) to protect the confidentiality or
security of Bank One's records
pertaining to the consumer, service,
product or transaction; to protect
against or prevent actual or potential
fraud, unauthorized transactions,
claims or other liability; for
required institutional risk control;
for resolving consumer disputes or
inquiries; to persons holding a legal
or beneficial interest relating to the
consumer, or acting in a fiduciary or
representative capacity on behalf of
the consumer; to provide information
to insurance rate advisory
organizations, guaranty funds or
agencies, or Bank One's attorneys,
accountants and auditors; to the
extent specifically permitted or
required under other provisions of
law, to law enforcement agencies, a
state insurance authority,
self-regulatory organizations or for
an investigation on a matter related
to public safety; to a consumer
reporting agency in accordance with
the Fair Credit Reporting Act; to
comply with Federal, State or local
laws, rules and other applicable legal
requirements, or a properly authorized
civil, criminal or regulatory
investigation, or subpoena or summons;
or to respond to judicial process or
government regulatory authorities
having jurisdiction over Bank One for
examination, compliance or other
purposes as authorized by law.
c. At any time, upon Bank One's request, XXXX shall
return to Bank One all Nonpublic Personal Information
in its possession to which it is not entitled in its
capacity as guarantor or owner of the loan. XXXX
agrees that money damages would not be a sufficient
remedy for any breach of this Section and that Bank
One shall be entitled to seek injunctive or other
equitable relief to remedy or prevent any breach or
threatened breach of this Section by XXXX. Such
remedy shall not be the exclusive remedy for any
breach of this Section, but shall be in addition to
all other rights and remedies available to Bank One
at law or in equity. Finally, Bank One shall be under
no obligation to take any action which, within Bank
One's reasonable judgment, would constitute a
violation of the Privacy Regulation or its internal
privacy policies.
17
d. XXXX shall permit Bank One to audit its operations
for compliance with Bank One's Information Security
Standards, upon reasonable notice from Bank One.
e. Notwithstanding any other term to the contrary
contained herein, this Section regarding Privacy of
Consumer Financial Information shall survive any
termination, cancellation, expiration and/or
rescission of this Agreement.
9.9 Nothing herein will be construed to prohibit XXXX from making, during
or after the term of this Agreement, any use or disclosure of
information concerning applicants or Borrowers so long as the identity
of the applicant or Borrower, and the identity of Bank One as the
lender, cannot be discerned by any third party to which such disclosure
is made. Without limitation of the foregoing, XXXX will be free to sell
to The First Marblehead Corporation statistical abstracts of
de-identified data based on the Loans guaranteed under this Agreement.
9.10 This Agreement may be executed in counterparts, all of which taken
together shall constitute one and the same instrument.
Section 10: INSURANCE
XXXX shall maintain insurance coverage of the types and in the amounts
as set forth in Exhibit F.
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.
18
IN WITNESS WHEREOF, XXXX and Bank One have caused this instrument to be
executed by their duly authorized officers under seal as of the day and year
indicated above.
THE EDUCATION RESOURCES BANK ONE, NATIONAL ASSOCIATION
INSTITUTE, INC.
By: /Xxx X. Xxxxx/ By: /Xxxx Xxxxx Xxxxx/
-------------------------- --------------------------------------
Print Name: Xxx X. Xxxxx Print Name: Xxxx Xxxxx Xxxxx
------------------ -------------------------------
Title: Acting President Title: Vice President, Education Lending
----------------------- ------------------------------------
19
TABLE OF EXHIBITS AND SCHEDULES
Exhibit A: Underwriting, Origination and Loan Term Guidelines for
EDUCATION ONE K-12 Loan Program, EDUCATION ONE Undergraduate
Loan Program, EDUCATION ONE Graduate Loan Program, and
EDUCATION ONE Continuing Education Loan Program
Exhibit B: XXXX Servicing Guidelines
Exhibit C: Forms of Application and Promissory Note
Exhibit D: Form of Truth-in-Lending Disclosure
Exhibit E: Bank One Information Security Standards
Exhibit F: Insurance Requirements
Schedule 3.3: XXXX Guaranty Payment Structure by Product
20
EXHIBIT A
UNDERWRITING, ORIGINATION AND LOAN TERM GUIDELINES FOR EDUCATION ONE K-12
LOAN PROGRAM, EDUCATION ONE UNDERGRADUATE LOAN PROGRAM, EDUCATION ONE
GRADUATE LOAN PROGRAM, AND EDUCATION ONE CONTINUING EDUCATION LOAN PROGRAM
[**]
21
EXHIBIT B
XXXX SERVICING GUIDELINES
[**]
22
EXHIBIT C
FORMS OF APPLICATION AND PROMISSORY NOTE
[**]
23
EXHIBIT D
FORM OF TRUTH-IN-LENDING DISCLOSURE
[**]
24
EXHIBIT E
BANK ONE INFORMATION SECURITY STANDARDS
[**]
25
EXHIBIT F
INSURANCE REQUIREMENTS
[**]
26
SCHEDULE 3.3
XXXX GUARANTY PAYMENT STRUCTURE BY PRODUCT
[**]
27
AMENDMENT dated November 1, 2002
to the
GUARANTY AGREEMENT
between
THE EDUCATION RESOURCES INSTITUTE, INC.
and
BANK ONE, N.A.
This Amendment Agreement is entered into as of the 1st day of November, 2002 by
and between Bank One, N.A. (the "Lender"), and The Education Resources
Institute, Inc. ("XXXX") with regard to the Guaranty Agreement between the
Lender and XXXX executed on April 18, 2002 (the "Guaranty Agreement").
WHEREAS, pursuant to the terms of the Guaranty Agreement, XXXX provides
guaranties of education loans made by the Lender; and
WHEREAS, XXXX and Lender desire to improve the customer service, collection
strategies and pricing that they offer to borrowers; and
WHEREAS, such improvements are only possible through the reasonably prudent
management of the risks imposed on XXXX as a guarantor of borrowers under the
Guaranty Agreement, which necessitates the provision of regular and complete
loan performance information to XXXX by Lender; and
WHEREAS, as a loan guarantor, XXXX is permitted under Regulation P of the
Federal Reserve Board and other applicable law to receive and process such
information on its own authority and not merely as a delegate or agent of
Lender.
NOW, THEREFORE, in consideration of the mutual promises contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by the parties, it is hereby agreed as follows:
1. The following paragraph will be added to Section 3.5 of the Guaranty
Agreement:
LENDER will cause its loan servicer to provide a
monthly report containing the information set forth on Exhibit
B hereto at TERI's expense; XXXX shall arrange directly with
the loan servicer to receive the report and negotiate any
necessary fee. Any other reporting or information shall be
provided upon TERI's agreement to reimburse LENDER or its
servicer for its incremental cost of such report.
2. A new Exhibit B will be added to the Guaranty Agreement, which shall read as
set forth in Exhibit B attached hereto.
28
IN WITNESS WHEREOF, the parties hereto by their duly authorized representatives
have executed this Amendment as of the date first written above.
THE EDUCATION RESOURCES BANK ONE, N.A.
INSTITUTE, INC.
By: /Xxxxxxxx X. X'Xxxxx/ By: /Xxxx Xxxxx Xxxxx/
---------------------------- ----------------------------
Name: Xxxxxxxx X. X'Xxxxx Name: Xxxx Xxxxx Xxxxx
----------------------- -----------------------
Title: President Title: Vice President
------------------------- -------------------------
29
EXHIBIT B
SERVICER DATA REQUIREMENTS
[**]
30
EXTENSION AGREEMENT
This Extension Agreement ("Agreement") is entered into by and among
Bank One, National Association, ("Bank One"), The First Marblehead Corporation,
a Delaware Corporation ("FMC"), and The Education Resources Institute, Inc.
("XXXX"), a Massachusetts not-for-profit corporation, and amends the Education
One Loan Program Agreements (as hereinafter defined). This Agreement is dated as
of November 1, 2002.
WITNESSES
WHEREAS, FMC and Bank One have entered into that certain Amended and
Restated Note Purchase Agreement dated as of May 1, 2002 (the "NPA"); and
WHEREAS, Bank One and XXXX have entered into that certain Amended and
Restated Guaranty Agreement dated as of April 18, 2002 and effective as of the
Conversion Date (as defined therein) (the "Guaranty Agreement"); and
WHEREAS, Bank One and XXXX have entered into that certain Amended and
Restated Loan Origination Agreement dated as of May 1, 2002 (the "LOA"); and
WHEREAS, the NPA, Guaranty Agreement and LOA are hereinafter referred
to as the "Education One Loan Program Agreements."
NOW THEREFORE, in consideration of these presents and the covenants
contained herein, the parties hereto hereby agree as follows:
1. NPA EXTENSION.
(a) The term of the NPA is hereby extended by amending the second
paragraph of Section 10.01 to read as follows:
"Provided that the Guaranty Agreement remains in effect, this Agreement
shall remain in full force and effect to and including April 30, 2007,
and thereafter shall renew for additional one year terms unless either
party gives written notice of termination at least 60 days prior to the
then-effective expiration date."
(b) The first clause in the last sentence of section 2.01 is amended to
read:
"For the first six (6) years of this Agreement,"
2. EXTENSION OF GUARANTY AGREEMENT. XXXX and Bank One agree that the Guaranty
Agreement is hereby extended by amending the first sentence of Section 8.12 to
read:
31
"The initial term of this Agreement shall commence on the Conversion
Date, and shall continue through April 30, 2007."
3. LOA. Bank One and XXXX agree that LOA requires no further amendment, as it is
coterminous with the Guaranty Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their duly authorized officers as of the date above first
written.
BANK ONE, NATIONAL ASSOCIATION
By: /Xxxx Xxxxx Xxxxx/
--------------------------------
Its: Vice President
THE EDUCATION RESOURCES INSTITUTE, INC.
By: /Xxxxxxxx X. X'Xxxxx
--------------------------------
Its: President
THE FIRST MARBLEHEAD CORPORATION
By: /Xxxxx Xxxxx/
--------------------------------
Its: President
32
AMENDMENT
to
PROGRAM AGREEMENTS
BANK ONE, N.A.
(EDUCATION ONE LOAN PROGRAM)
This Amendment is entered into as of the 1st day of April, 2003 by and between
Bank One, N.A., (the "Lender"), The First Marblehead Corporation ("FMC"), and
The Education Resources Institute, Inc. ("XXXX") with regard to the Guaranty
Agreement between Lender and XXXX dated May 13, 2002 (the " Guaranty
Agreement"), the Loan Origination Agreement between the same parties dated May
13, 2002 (the "Loan Origination Agreement") and a Note Purchase Agreement
between Lender and FMC dated May 1, 2002. Capitalized terms used herein without
definition have the meaning set forth in the Guaranty Agreement.
WHEREAS, XXXX, FMC and Lender desire to adopt new program terms for the
2003-2004 program year;
NOW, THEREFORE, in consideration of the mutual promises contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by the parties, it is hereby agreed as follows:
1. PRICING. XXXX and the Lender hereby amend and restate Schedule 3.3 to the
Guaranty Agreement by adopting the Schedule 3.3 attached hereto as Exhibit A.
2. PROGRAM GUIDELINES. XXXX and the Lender hereby amend and restate the Program
Guidelines by adopting the Program Guidelines attached hereto as Exhibit B1.
Differences between the new and old Program Guidelines are shown in blackline in
Exhibit B2. Promissory notes and the Truth-in-Lending Disclosure for program
year 2003-04 for the Education One program shall be agreed to by the parties in
separate writings (which may take the form of e-mail correspondence).
3. PURCHASE PRICE. The Lender and FMC hereby amend and restate Section 2.04 of
the Note Purchase Agreement to read in its entirety as set forth on Exhibit C
attached hereto.
4. TRANSITION. This Amendment shall be effective for each Program loan for which
applications are received on or after a date set by XXXX by notice delivered to
Lender as soon as reasonably possible.
5. FULL FORCE AND EFFECT. As amended herein, the Guaranty Agreement, Loan
Origination Agreement, and Note Purchase Agreement remain in full force and
effect.
33
IN WITNESS WHEREOF, the parties hereto by their duly authorized representatives
have executed this Amendment as of the date first written above.
THE EDUCATION RESOURCES BANK ONE, N.A.
INSTITUTE, INC.
By: /Xxxxxxxx X. X'Xxxxx/ By: /Xxxx Xxxxx Xxxxx/
------------------------------- ------------------------------
Name: Xxxxxxxx X. X'Xxxxx Name: Xxxx Xxxxx Xxxxx
----------------------------- ----------------------------
Title: President Title: Vice President
---------------------------- ---------------------------
THE FIRST MARBLEHEAD CORPORATION
By: /Xxxxx Xxxxx/
-----------------------------
Name: Xxxxx Xxxxx
--------------------------------
Title: President
--------------------------------
34
TABLE OF EXHIBITS
Exhibit A Schedule 3.3
Exhibit B1 Program Guidelines
Exhibit B2 Blackline of Program Guidelines
Exhibit C Section 2.04 Minimum Purchase Price
EXHIBIT A
SCHEDULE 3.3 TO GUARANTY AGREEMENT BETWEEN XXXX AND BANK ONE
Bank One ED ONE Product: XXXX Guarantee Fee Payment Structure by Program
[**]
EXHIBIT B1
UNDERWRITING, ORIGINATION AND LOAN TERM
---------------------------------------
GUIDELINES FOR:
--------------
BANK ONE
--------
K-12 LOANS
UNDERGRADUATE LOANS
GRADUATE LOANS
CONTINUING EDUCATION LOANS
THE EDUCATION RESOURCES INSTITUTE, INC.
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
[**]
EXHIBIT B2
UNDERWRITING, ORIGINATION AND LOAN TERM
GUIDELINES FOR:
BANK ONE
K-12 LOANS
UNDERGRADUATE LOANS
GRADUATE LOANS
CONTINUING EDUCATION LOANS
THE EDUCATION RESOURCES INSTITUTE, INC.
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
[**]
EXHIBIT C
2.04. MINIMUM PURCHASE PRICE.
[**]
AMENDMENT TO PROGRAM AGREEMENTS
(BANK ONE'S CORPORATE ADVANTAGE LOAN PROGRAMS)
This Amendment to Program Agreements (this "Amendment") amends the
Program Agreements, as defined below, entered into by and among Bank One,
National Association ("Bank One"), The First Marblehead Corporation ("FMC"), The
Education Resources Institute, Inc. ("XXXX"), and U.S. Bank, N.A. This Amendment
is dated as of May 1, 2003.
W I T N E S S E T H
WHEREAS, Bank One desires to offer its Education One loan products with
reduced borrower fees to corporate employee and affinity groups; and
WHEREAS, the parties hereto agree that such loans will be originated,
guaranteed, and purchased under the Program Agreements (as defined below), as
modified for such loans in this Amendment;
NOW, THEREFORE, in consideration of these presents and the covenants
contained herein, the parties hereto hereby agree as follows:
I. DEFINITIONS.
"Corporate Advantage Loan Programs" shall mean any program (a) offered under the
Education One Program Guidelines, as amended from time to time, but involving
the discounted consumer pricing set forth in Schedule 3.3 attached hereto, and
(b) marketed by Bank One and its corporate partners, including any corporate or
affinity groups proposed by Bank One to XXXX to which XXXX consents in writing.
Corporate Advantage Loan Program partners approved by XXXX are shown on Exhibit
C attached hereto. The parties intend to update Exhibit C as new Corporate
Advantage partners are added by Bank One with the consent of XXXX.
"Deposit and Security Agreement" means that certain agreement bearing that name
entered into by and among Bank One, FMC, XXXX, and State Street Bank and Trust
Company (n/k/a U.S. Bank, N.A.) dated as of April 30, 2001, as amended.
"Guaranty Agreement" means that certain amended and restated agreement bearing
that name entered into by and between Bank One and XXXX dated as of May 13,
2002, as amended.
"Loan Origination Agreement" means that certain amended and restated agreement
bearing that name entered into between Bank One and XXXX dated as of May 13,
2002, as amended.
"Note Purchase Agreement" means that certain amended and restated agreement
bearing that name by and between FMC and Program Lender dated as of May 1, 2002,
as amended.
"Program Agreements" means the Guaranty Agreement, the Loan Origination
Agreement, the Note Purchase Agreement, and the Deposit and Security Agreement,
all as heretofore amended and as heretofore extended pursuant to an Extension
Agreement dated November 1, 2002, and
including all Exhibits and Schedules thereto, including, without limitation, the
Program Guidelines.
"Program Guidelines" shall mean the document of that name, as amended from time
to time, attached to and made a part of the Guaranty Agreement.
II. AMENDMENTS
A. Generally. Bank One hereby represents and warrants that the marketing of the
Corporate Advantage Loan Programs by Bank One and its corporate
partners shall comply with all applicable federal and state laws and
regulations. The foregoing representation and warranty is hereby made a part of
each of the Program Agreements and any breach of the foregoing representation
and warranty shall be subject to indemnification as set forth in the applicable
Program Agreement.
B. Program Agreements. All Program Agreements are hereby amended to include the
above definition of "Corporate Advantage Loan Programs" and in each Program
Agreement, the definitions of "Education One Program" and "Program" shall
include Corporate Advantage Loan Programs, with the modifications herein that
apply to such programs. Each definition of "Loans" or "Education One Loans" in
the Program Agreements shall include loans made under the Corporate Advantage
Loan Programs, as specified herein.
C. GUARANTY AGREEMENT.
1. With respect to all Corporate Advantage Loan Programs, an
additional Schedule 3.3 is added to the Guaranty Agreement in
the form of Schedule 3.3 attached hereto.
2. "Promissory Notes" shall include the notes attached hereto as
Exhibit A, as each shall be amended from time to time under
Section 3.2 of the Guaranty Agreement.
3. Section 3.2 of the Guaranty Agreement is hereby amended by
adding the following:
"Upon TERI's request, Bank One will submit to XXXX sample
copies of promotional and marketing materials used in
connection with the Corporate Advantage Loan Programs. No such
delivery of materials shall constitute or be construed as a
representation or warranty by XXXX that such materials comply
with applicable law or with Bank One's obligations under this
Agreement, and no such delivery shall excuse Bank One's
performance of any of its obligations under this Agreement."
D. LOAN ORIGINATION AGREEMENT. With respect to the Corporate Advantage
Loan Program, all marketing materials shall direct applicants to a web
site created by Bank One for the particular corporate or affinity group
in question. Bank One shall have full responsibility for hosting,
supporting, and maintaining such web sites and for ensuring that
Corporate
Advantage Loan Program borrowers are directed to the proper
web site and no other web site to apply for their loan. Bank One shall
also ensure that such web sites interface with TERI's web application
system in a manner directed by XXXX to obtain correct fulfillment.
E. NOTE PURCHASE AGREEMENT. In the Note Purchase Agreement, Section 2.04
is amended by adding Section 2.04 attached hereto for Corporate
Advantage Loan Programs.
F. DEPOSIT AND SECURITY AGREEMENT. The Deposit and Security Agreement
shall apply to all Corporate Advantage Loan Program loans guaranteed
under the Guaranty Agreement.
G. SERVICING AGREEMENT The obligations of FMC under this Amendment are
conditioned upon FMC and PHEAA entering into a Supplement to
Alternative Servicing Agreement substantially in the form attached
hereto as Exhibit B.
H. In all other respects, the Program Agreements are hereby ratified and
confirmed and shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Instrument to be
executed as of the date above first written.
THE EDUCATION RESOURCES INSTITUTE, INC.
By: /Xxxxxxxx X. X'Xxxxx/
------------------------------------
Its: President
BANK ONE, N.A.
By: /Xxxx Xxxxx Xxxxx/
------------------------------------
Its: Vice President
THE FIRST MARBLEHEAD CORPORATION
By: /Xxxxx Xxxxx/
------------------------------------
Its: President
US BANK, N.A.
By: /Xxxxxx Xxxxxxx/
------------------------------------
Its: Vice President
TABLE OF EXHIBITS
Schedule 3.3 Guaranty Fees and Loan Pricing
Schedule 2.04 Revised Section 2.04 of the Note Purchase Agreement
Exhibit A Promissory Notes
Exhibit B Supplement to Alternative Servicing Agreement
Exhibit C Corporate Advantage Partners Approved by XXXX
SCHEDULE 3.3 TO GUARANTY AGREEMENT BETWEEN XXXX AND BANK ONE
[**]
SCHEDULE 2.04.
MINIMUM PURCHASE PRICE.
----------------------
[**]
EXHIBIT A
PROMISSORY NOTES
[**]
EXHIBIT B
SERVICING SUPPLEMENT
SUPPLEMENT TO
ALTERNATIVE SERVICING AGREEMENT
BETWEEN
PENNSYLVANIA HIGHER EDUCATION ASSISTANCE AGENCY
AND
THE FIRST MARBLEHEAD CORPORATION
[**]
EXHIBIT C
CORPORATE ADVANTAGE PARTNERS APPROVED BY XXXX
[**]
FOURTH AMENDMENT TO PROGRAM AGREEMENTS
(BANK ONE'S PARENT LOAN PROGRAMS)
This Fourth Amendment to Program Agreements (this "Amendment") amends
the Program Agreements, as defined below, entered into by and among Bank One,
National Association ("Bank One"), The First Marblehead Corporation ("FMC"), The
Education Resources Institute, Inc. ("XXXX"), and U.S. Bank, N.A. This Amendment
is dated as of November 1, 2003.
W I T N E S S E T H
WHEREAS, the Program Agreements have previously been amended in an
Extension Agreement for the Education One program dated November 1, 2002, an
Amendment to Program Agreements for program year 2003-04 for the Education One
program, dated April 1, 2003, and an Amendment to Program Agreements (Corporate
Advantage Program), dated May 1, 2003 (collectively, "Prior Amendments"); and;
WHEREAS Bank One desires to offer a new Education One loan product on a
trial basis to parents of undergraduate and graduate students; and
WHEREAS, the parties hereto agree that such loans will be originated,
guaranteed, and purchased under the Program Agreements (as defined below), as
modified for such loans in this Amendment;
NOW, THEREFORE, in consideration of these presents and the covenants
contained herein, the parties hereto hereby agree as follows:
I. DEFINITIONS.
"Parent Loan Program" shall mean the program (a) offered under the Education One
Program Guidelines (Education One Parent Loans) attached hereto as Exhibit A, as
amended from time to time ("Parent Loan Program Guidelines"), (b) involving the
pricing set forth in Schedule 3.3 attached hereto, (b) marketed by Bank One to
pre-screened applicants according to the prescreen criteria in the "Parent Only
Loan for Ed One: Pilot Program" attached hereto as Exhibit B ("Prescreen
Criteria"); and (4) documented on the promissory note forms attached hereto as
Exhibit C, as amended from time to time ("Parent Promissory Notes").
"Deposit and Security Agreement" means that certain agreement bearing that name
entered into by and among Bank One, FMC, XXXX, and State Street Bank and Trust
Company (n/k/a U.S. Bank, N.A.) dated as of April 30, 2001, as previously
amended.
"Guaranty Agreement" means that certain amended and restated agreement bearing
that name entered into by and between Bank One and XXXX dated as of May 13,
2002, as previously amended.
"Loan Origination Agreement" means that certain amended and restated agreement
bearing that name entered into between Bank One and XXXX dated as of May 13,
2002, as previously amended.
"Note Purchase Agreement" means that certain amended and restated agreement
bearing that name by and between FMC and Program Lender dated as of May 1, 2002,
as previously amended.
"Parent Loan Notes" means notes evidencing loans made under the Parent Loan
Program
"Program Agreements" means the Guaranty Agreement, the Loan Origination
Agreement, the Note Purchase Agreement, and the Deposit and Security Agreement,
all as heretofore amended and extended in the Prior Amendments, and including
all Exhibits and Schedules thereto, including, without limitation, the Program
Guidelines.
II. Amendments
A. GENERALLY. Bank One hereby represents and warrants that the marketing
of the Parent Loan Program by Bank One shall comply with all applicable
federal and state laws and regulations. The foregoing representation
and warranty is hereby made a part of each of the Program Agreements
and any breach of the foregoing representation and warranty shall be
subject to indemnification as set forth in the applicable Program
Agreement.
B. PROGRAM AGREEMENTS. All Program Agreements are hereby amended to
include the above definition of "Parent Loan Program" and in each
Program Agreement, the definitions of "Education One Program" and
"Program" shall include the Parent Loan Program, with the modifications
herein that apply to the Parent Loan Program.
C. GUARANTY AGREEMENT. In the Guaranty Agreement:
1. With respect to the Parent Loan Program, an additional
Schedule 3.3 is added to the Guaranty Agreement in the form of
Schedule 3.3 attached hereto.
2. "Loan" shall include loans made under the Parent Loan Program.
2. "Promissory Notes" shall include the Parent Promissory Notes.
3. "Program Guidelines" shall include the Parent Loan Program
Guidelines.
D. Loan Origination Agreement. With respect to the Parent Loan Program,
all marketing materials shall direct applicants to a web site created
by Bank One for that particular loan program. Bank One shall have full
responsibility for hosting, supporting, and maintaining such web site
and for ensuring that Parent Loan Program borrowers are directed to the
proper web site and no other web site to apply for their loan. Bank One
shall also ensure that such web site interfaces with TERI's web
application system in a manner directed by XXXX to obtain correct
fulfillment.
E. Note Purchase Agreement. In the Note Purchase Agreement:
1. In Article I, definitions:
a. The definition of "EDUCATION ONE Loan" is amended to
include those loans made under the Parent Loan
Program that (a) conform to the requirements of the
Program Guidelines at the time the loans were made,
(b) are serviced by the Servicer (as defined in the
Note Purchase Agreement) in accordance with the
Program Guidelines, and (c) are covered by and
subject to all the benefits of the Guaranty
Agreement.
b. The definition of "EDUCATION ONE Notes" is amended to
include Parent Loan Notes.
c. The definition of "EDUCATION ONE Pool" is amended to
include Seasoned Loans that are Parent Loan Notes
purchased and pledged or intended to be purchased and
pledged as collateral in a particular Securitization
Transaction.
2. Section 2.04 is amended by adding Section 2.04 attached hereto
for the Parent Loan Program.
F. DEPOSIT AND SECURITY AGREEMENT. The Deposit and Security Agreement
shall apply to all Parent Loan Program loans guaranteed under the
Guaranty Agreement.
G. In all other respects, the Program Agreements are hereby ratified and
confirmed and shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Instrument to be
executed as of the date above first written.
THE EDUCATION RESOURCES INSTITUTE, INC.
By: /Xxxxxxx Xxxxxx/
--------------------------------
Its: Treasurer
BANK ONE, N.A.
By: /Xxxxxxx Xxxxxx/
--------------------------------
Its: EVP
THE FIRST MARBLEHEAD CORPORATION
By: /Xxxxx Xxxxx/
--------------------------------
Its: President
US BANK, N.A.
By: /Xxxxxx X. Xxxxxxx/
--------------------------------
Its: Vice President
TABLE OF EXHIBITS
Schedule 3.3 Guaranty Fees and Loan Pricing for Parent Loan Program
Schedule 2.04 Section 2.04 of the Note Purchase Agreement for
the Parent Loan Program
Exhibit A Parent Loan Program Guidelines
Exhibit B Prescreen Criteria for Parent Loan Program
Exhibit C Promissory Notes for Parent Loan Program
Exhibit D Supplement to Alternative Servicing Agreement
SCHEDULE 3.3 TO GUARANTY AGREEMENT BETWEEN XXXX AND BANK ONE
FOR BANK ONE'S PARENT LOAN PRODUCT
(THIS SCHEDULE 3.3 IS IN ADDITION TO, AND DOES
NOT REPLACE, OTHER SCHEDULE 3.3S IN EFFECT
FOR THE EDUCATION ONE PROGRAM UNDER THE
GUARANTY AGREEMENT.)
[**]
SCHEDULE 2.04.
MINIMUM PURCHASE PRICE.
----------------------
[**]
EXHIBIT A
PARENT LOAN PROGRAM GUIDELINES
[**]
EXHIBIT B
PRESCREEN CRITERIA FOR PARENT LOAN PROGRAM
[**]
EXHIBIT C
PROMISSORY NOTES FOR PARENT LOAN PROGRAM
[**]
FIFTH AMENDMENT
to
PROGRAM AGREEMENTS
BANK ONE, N.A.
(EDUCATION ONE LOAN PROGRAM,
including the CORPORATE ADVANTAGE LOAN PROGRAM)
This Fifth Amendment to Program Agreements (this "Amendment") is entered into as
of the 1st day of March, 2004 by and between Bank One, N.A., ("Bank One") and
The Education Resources Institute, Inc. ("XXXX") with regard to the Guaranty
Agreement between Bank One and XXXX dated May 13, 2002 (the " Guaranty
Agreement"). Capitalized terms used herein without definition have the meaning
set forth in the Guaranty Agreement.
WHEREAS, documents for the Program have been previously amended in an Extension
Agreement for the Education One program dated November 1, 2002; an Amendment to
Program Agreements for program year 2003-04 for the Education One program, dated
April 1, 2003; and an Amendment to Program Agreements (Corporate Advantage
Program), dated May 1, 2003; and the Fourth Amendment to Program Agreements
(Bank One's Parent Loan Programs);
WHEREAS, XXXX and Bank One desire to adopt new program terms for the 2004-2005
program year for the Education One Loan Program (including the Corporate
Advantage Loan Program);
NOW, THEREFORE, in consideration of the mutual promises contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by the parties, it is hereby agreed as follows:
1. Pricing. XXXX and Bank One hereby amend and restate Schedule 3.3 to the
Guaranty Agreement by adopting the Schedule 3.3 attached hereto as Exhibit A.
The attached Schedule 3.3 does not apply to the Bank One Parent Loan program,
which is documented separately.
2. Program Guidelines. XXXX and the Lender hereby amend and restate the Program
Guidelines by adopting the Program Guidelines attached hereto as Exhibit B.
3. Transition. This Amendment shall be effective for each Program loan for which
applications are received on or after a date set by XXXX by notice delivered to
Lender as soon as reasonably possible.
4. Full Force and Effect. As amended herein, the Guaranty Agreement remains in
full force and effect.
IN WITNESS WHEREOF, the parties hereto by their duly authorized representatives
have executed this Amendment as of the date first written above.
THE EDUCATION RESOURCES BANK ONE, N.A.
INSTITUTE, INC.
By: /Xxxxxxxx X. X'Xxxxx/ By: /Xxxxxxx Xxxxxx/
-------------------------------- --------------------------------
Name: Xxxxxxxx X. X'Xxxxx Name: Xxxxxxx Xxxxxx
------------------------------ ------------------------------
Title: President Title: EVP
----------------------------- -----------------------------
3
TABLE OF EXHIBITS
Exhibit A Schedule 3.3
Exhibit B Program Guidelines
EXHIBIT A
SCHEDULE 3.3
[**]
1
EXHIBIT B
PROGRAM GUIDELINES
[**]
2
