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EXHIBIT 4.6
STATE OF CALIFORNIA XXXX XXXXXX, Governor
===============================================================================
CALIFORNIA STUDENT AID COMMISSION
X.X. XXX 000000
XXXXXXXXXX, XX 00000-0000 [SEAL]
AGREEMENT TO GUARANTEE CLAS PROGRAM LOANS MADE
BY A COMMERCIAL LENDER
THIS AGREEMENT, entered into between the California Student Aid Commission
(hereinafter referred to as "SAC") and
The First National Bank of Chicago as Trustee for the PNC Student Loan Trusts
Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000
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(Name of Institution) (City and State)
(hereinafter referred to as "Lender")
WITNESSETH:
WHEREAS, SAC is a state agency with objectives and purposes that are
solely educational and charitable;
WHEREAS, SAC conducts the California Loans to Assist Students Program
(hereinafter referred to as "CLAS Program") with loans made by participating
lenders to eligible borrowers; and
WHEREAS, the Lender is desirous of participating in the CLAS Program
subject to the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration if the initial loan with the Lender
makes hereunder, and in further consideration of the mutual covenants
hereinafter expressed, SAC and the Lender agree as follows:
1. As used herein, the following words shall have the meanings
respectively indicated:
Act: The Higher Education Act of 1965 (Public Law 89-329), as
amended and in effect, or any successor enactment
thereto, and the rules and regulations in effect.
Approved Notes: A Promissory Note and Disclosure Statement
(CLAS 130) or a Repayment Schedule and Disclosure
Statement (CLAS 134) guaranteed by SAC.
Borrower: A student or a parent who is the maker of an
Approved Note.
Default: With respect to an Approved Note, the occurrence of
any event which shall constitute a default under the terms
of such Note.
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Eligible Educational Institution: Any institution of post-
secondary education which is an "eligible institution"
under the Act and is eligible under the CLAS Program.
Loan Application: The application for a loan on CLAS 110 to
be executed by the borrower, the student, the school, and
the Lender.
Notice of Default: A notice on CLAS 170 that Approved Note is
in default.
Parent: A person who (1) is the dependent undergraduate
student's mother, father, or legal guardian or adoptive
parent,
(2) is a national or a permanent resident of the United
States or is in the United States for other than a
temporary purpose and intends to become a permanent
resident thereof,
(3) is a resident of California and a parent of a
dependent undergraduate student who is enrolled at an
eligible educational institution located either in or
outside of California,
(4) is or is not a resident of California and is the parent
of a dependent undergraduate student who is enrolled at
an eligible educational institution located in California.
Procedural handbook: The manual provided by the SAC for
purposes of describing how the CLAS Program is to be
administered (CLAS 170).
Repayment Schedule and Disclosure Statement: A schedule of
payments on CLAS 134.
Student: A person who (1) is a national or a permanent
resident of the United States or is in the United States
for other than a temporary purpose and intends to
become a permanent resident thereof,
(2) is accepted for enrollment or is enrolled and in
good standing and making satisfactory progress at the
school,
(3) is carrying at least one-half the normal full-time
academic workload as determined by the school, and
(4) is a California resident if enrolled as a graduate,
a professional, or an independent undergraduate student
at an eligible educational institution located outside
of California, or
(5) is or is not a California resident if enrolled as a
graduate, a professional, or an independent undergraduate
student at an eligible educational institution located in
California, or
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(6) is a California Resident if enrolled as a dependent
undergraduate student at an eligible educational
institution located outside of California unless the
parent borrower is a California resident, or
(7) is or is not a California resident if enrolled as a
dependent undergraduate student at an eligible educational
institution located in California providing the parent
borrower is a California resident.
All documents and instruments referred to above shall be in the current
form as furnished from time to time and approved by SAC.
2. Nothing contained in this Agreement shall obligate the Lender to make
any particular loan or number of loans under the CLAS Program, but
the Lender agrees that it will refinance or extend the maturity of
each Approved Note held by it from time to time, in accordance with
the terms of such Approved Note and this Agreement.
3. The Lender agrees that, in respect of all loans made by it under the
CLAS Program and all Approved Notes held by it from time to time, it
will:
(a) exercise reasonable care and diligence in the making,
servicing and collection thereof,
(b) comply with all procedures and conditions on its part to be
performed as set forth in this Agreement and the Procedural
Handbook,
(c) comply with all Federal and State laws and regulations
applicable thereto, including the Federal Consumer Credit
Protection Act and regulations thereunder, and
(d) provide promptly to SAC such information and reports as
may from time to time be reasonably requested by SAC.
4. Upon payment to SAC of any required insurance premium, SAC will
guarantee each Promissory Note and Disclosure Statement evidencing a
loan made to a student by the Lender pursuant to the CLAS Program
provided, however, that SAC shall not be obligated to guarantee any
such Note if:
(a) such guarantee would cause the aggregate amount of unpaid
principal and interest of all notes guaranteed by SAC to exceed
the maximum dollar amount which may then be supported by its
Guarantee Reserve Fund, as required under paragraph 7 hereof, or
(b) SAC in its sole discretion determines that the procedures and
requirements of applicable law and regulations, the Agreement,
and the procedural Handbook have not been complied with in
respect of such Promissory Note and Disclosure Statement.
5. SAC will guarantee each Payout Note evidencing the refinancing of any
Payout Note or Promissory Note and Disclosure Statement which has
been guaranteed by SAC,
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or guarantee each extension of the maturity date of an Approved Note
provided, however, that SAC shall not be obligated to guarantee any
such Note or extension if SAC in its sole discretion determines that
the refinancing or extension, as the case may be, is not in
accordance with the terms of the underlying Approved Note or the
procedures and requirements of applicable law and regulations, this
Agreement, and the Procedural Handbook.
6. (a) In the event of a default in respect of any Approved Note, the
Lender shall follow the procedure set forth in the Procedural
Handbook. SAC does not guarantee payment by the borrower of any
delinquency charges imposed for late payment and will not
accept a default claim based solely on nonpayment of such
charges. Upon receipt from the Lender of a Notice of Default
together with the Note (guaranteed by SAC), the Loan
Application, and evidence of collection effort satisfactory to
SAC, SAC will pay to the Lender the full amount of the unpaid
balance of principal and interest due on such Note (other than
any portion of such interest payable by the U.S. Department of
Education under the Act) provided the Lender has complied in
all material respects with the procedures and requirements of
applicable law and regulations, this Agreement, and the
Procedural Handbook in respect of such Note. SAC shall
thereupon succeed to all the rights of the Lender under such
Note.
(b) The liability of SAC as guarantor of any Approved Note in
accordance herewith shall not be affected by the fact that the
borrower was a minor at the time of his execution of the Note.
Upon the death or permanent and total disability of the
borrower, the borrower's liability will be discharged by SAC.
(c) Prior to submitting a default claim, the Lender is obligated to
make reasonable collection efforts against the borrower. For a
loan made with a co-maker, such collection efforts are required
in addition to any collection efforts the Lender may make
against the co-maker of the loan.
7. SAC covenants that it will at all times, so long as the Lender is the
holder of an Approved Note, hold and maintain a Guarantee Reserve
Fund, represented by cash and marketable securities having a market
value of not less than 1% of the aggregate amount of unpaid principal
and interest of all Approved Notes covered by Federal reinsurance
pursuant to an agreement between SAC and the U.S. Secretary of
Education.
8. (a) No change, other than the extension of the maturity date of a
Promissory Note and Disclosure Statement pursuant to paragraph 5
of this Agreement, shall be made in the terms of any Approved
Note, except with the prior written consent of SAC. Any such
change made without such consent shall have the effect, at the
option of SAC, of voiding SAC's guarantee of such Approved Note.
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(b) If the Lender shall violate or fail to comply with any
applicable law or governmental regulation in respect of any
Approved Note, then the Lender hereby agrees to assume
liability for, and does hereby indemnify, protect and keep
harmless SAC, its successors, assigns, directors, officers,
agents and servants, from and against, any and all liabilities,
losses, damages, penalties, claims, actions, expenses and
disbursements, including legal fees and expenses, imposed on,
incurred by or asserted against them or any of them, in any way
relating to or arising out of such violation or failure to
comply, regardless of whether SAC shall have purchased such
Approved Note from the Lender.
9. SAC shall furnish to the lender from time to time a certificate
as to the names and facsimile signatures of the officers
authorized to execute in its name and on its behalf guarantees
of Notes under this Agreement, and SAC hereby warrants to the
Lender that the authority so certified shall and continue in
full force and effect until SAC shall have delivered to the
Lender written notice of revocation thereof. No recourse under
or upon this Agreement or any Approved Note or Guarantee
thereof, or for any claim based thereon or otherwise in
thereof, shall be had against incorporator, member, officer or
trustee, as such, past, present or future, of SAC or any
successor corporation; either directly or through SAC or any
successor corporation; it being expressly understood that this
Agreement and the guarantees of Approved Notes are solely
corporate obligations and that no personal liability whatever
shall attach to, or is or shall be incurred by, the
incorporators, members, officers, or trustees, as such, of SAC
or of any successor corporation, or any of them, because of
this Agreement or any Approved Note or guarantee thereof.
10. Any notice required or permitted by this Agreement shall be in
writing and shall be deemed to have been duly given if mailed,
first-class postage prepaid, addressed: (1) if to the California
Student Aid Commission, X.X. Xxx 000000, Xxxxxxxxxx XX 00000-0000
(2) if to the Lender, at the address indicated on page 6, or (3) at
such other address of which the party to be notified shall have
given notice as aforesaid.
11. This Agreement may be terminated by either party upon not less than
60 days written notice to the other party. Such terminations shall
not affect any obligation incurred pursuant to this Agreement prior
to the time that such termination notice becomes effective.
12. This Agreement shall inure to the benefits of and be binding upon
SAC and the Lender and their respective successors and assigns. This
Agreement supersedes all existing agreements between the parties
with respect to the subject matter hereof. This Agreement shall not
be varied by oral agreement, but only by an instrument in writing
duly executed by the parties hereto. Any waiver or modification,
expressed or implied, by SAC of any term or condition contained in
this Agreement shall operate as such only in the specific instance
and shall not be construed as a waiver or modification of any such
condition generally or in any other instance.
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IN WITNESS THEREOF, The California Student Aid Commission and the
Lender have each caused this instrument to be executed the 24th day of March
1997, by their respective duly authorized officers.
The First National Bank of Chicago
as Trustee for the
PNC Student Loan Trusts CALIFORNIA STUDENT
---------------------------------- AID COMMISSION
Lender
/s/ Xxxxxxx X. Xxxxxx Assistant Vice President /s/
---------------------------------------------- --------------------------
Signature Title Authorized Signature
Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
------------------------------------
Xxxxxx Xxxxxxx
------------------------------------
Xxxx Xxxxx Zip
LID 833364
TIN 00-0000000
-------------------------------------
Federal Identification Number
--------------------------------------------------------------------------------
FEDERAL REINSURANCE
Loans made pursuant to the Higher Education Act of 1965 and guaranteed by SAC
which go into default are reinsured under an agreement with the U.S. Secretary
of Education. Under that agreement, 100% of the losses from such defaults will
be borne by the U.S. secretary of education through Federal Fiscal Year
1982-83. For federal fiscal year 1983-84 and thereafter, 100% of the losses
from such default will be borne by the U.S. Secretary of Education except that:
(a) if, for any Federal Fiscal Year, the amount of such reimbursement payments
by the U.S. Secretary of Education exceeds 5% of the loans which are guaranteed
by SAC and which were in repayment at the end of the preceding fiscal year, the
amount to be paid SAC as reimbursed for such excess shall be equal to 90% of
the amount of excess, and (b) if, for any Federal Fiscal Year, the amount of
such reimbursement exceeds 9% of such loans, the amount to be paid as
reimbursement for such excess shall be equal to 80% of the amount of such
excess.
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RETURN TWO SIGNED COPIES TO CSAC: ONE SIGNED COPY WILL BE
RETURNED TO THE LENDER
CALIFORNIA STUDENT AID COMMISSION
LENDER SERVICES BRANCH
X.X. XXX 000000
XXXXXXXXXX, XX 00000-0000
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[LOGO] CALIFORNIA STUDENT AID COMMISSION
0000 X Xxxxxx Xxxxx 000, Xxxxx Xxxxxxxx
X.X. Xxx 000000, Xxxxxxxxxx, XX 00000-0000
(000) 000-0000
AGREEMENT TO GUARANTEE LOANS MADE BY A COMMERCIAL LENDER
THIS AGREEMENT, entered into between the California Student Aid Commission
(hereinafter referred to as "SAC") and
The First National Bank of Chicago as Trustee for the PNC Student Loan Trust
Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000
----------------------------------------------------------------------------
(Name of Institution) (City and State)
(hereinafter referred to as "Lender")
WITNESSETH:
WHEREAS, SAC is a state agency with objectives and purposes that are
solely educational and charitable;
WHEREAS, SAC conducts the California Loans to Assist Students Program
(hereinafter referred to as "CGSLP") with loans made by participating
lenders to eligible students attending eligible educational institutions; and
WHEREAS, the Lender is desirous of participating in the CGSLP
subject to the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration if the initial loan with the Lender
makes hereunder, and in further consideration of the mutual covenants
hereinafter expressed, SAC and the Lender agree as follows:
1. As used herein, the following words shall have the meanings
respectively indicated:
Act: The Higher Education Act of 1965 (Public Law 89-329), as
amended and in effect, or any successor enactment
thereto, and the rules and regulations in effect.
[LETTER-
Approved Notes: A Promissory Note and Disclosure Statement HEAD]
(CGSLP 130) or A Payout Note and Disclosure statement
(CGSLP 132), or a Repayment Schedule and Disclosure
Statement (CGSLP 134) guaranteed by SAC.
Borrower: A student who is the maker of an Approved Note.
Default: With respect to any Approved Note, the occurrence of
any event which shall constitute a default under the terms
of such Note.
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Eligible Educational Institution: Any institution of post-
secondary education which is an "eligible institution"
under the Act and is eligible under the CGSLP.
Loan Application: The application for a loan on CGLSP 110 to
be executed by the student, the school, and the Lender.
Notice of Default: A notice on CGLSP 170 that Approved Note is
in default.
Payout Note: A Promissory Note on CGSLP 132.
Procedural Handbook: The manual provided by the SAC for
purposes of describing how the CGSLP is to be
administered (CGSLP 170).
Repayment Schedule and Disclosure Statement: A schedule of
payments on CGSLP 134.
Student: A person who (1) is a national or a permanent
resident of the United States or is in the United States
for other than a temporary purpose and intends to
become a permanent resident thereof,
(2) is accepted for enrollment or is enrolled and in
good standing and making satisfactory progress at the
school,
(3) is carrying at least one-half the normal full-time
academic workload as determined by the school, and
(4) is a California resident if enrolled as a graduate,
a professional, or an independent undergraduate student
at an eligible educational institution located outside
of California, or
All documents and instruments referred to above shall be in the
current form as furnished from time to time and approved by SAC.
2. Nothing contained in this Agreement shall obligate the Lender to make
any particular loan or number of loans under the CGSLP, but the
Lender agrees that it will refinance or extend the maturity of each
Approved Note held by it from time to time, in accordance with the
terms of such Approved Note and this Agreement.
3. The Lender agrees that, in respect of all loans made by it under the
CGSLP and all Approved Notes held by it from time to time, it will:
(a) exercise reasonable care and diligence in the making,
servicing and collection thereof,
(b) comply with all procedures and conditions on its part to be
performed as set forth in this Agreement and the
Procedural Handbook,
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9
(c) comply with all Federal and State laws and regulations
applicable thereto, including the Federal Consumer Credit
Protection Act and regulations thereunder, and
(d) provide promptly to SAC such information and reports as
may from time to time be reasonably requested by SAC.
4. Upon payment to SAC of any required insurance premium, SAC will
guarantee each Promissory Note and Disclosure Statement evidencing a
loan made to a student by the Lender pursuant to the CGSLP
provided, however, that SAC shall not be obligated to guarantee any
such Note if:
(a) such guarantee would cause the aggregate amount of unpaid
principal and interest of all notes guaranteed by SAC to exceed
the maximum dollar amount which may then be supported by its
Guarantee Reserve Fund, as required under paragraph 7 hereof, or
(b) SAC in its sole discretion determines that the procedures and
requirements of applicable law and regulations, the Agreement,
and the Procedural Handbook have not been complied with in
respect of such Promissory Note and Disclosure Statement.
5. SAC will guarantee each Payout Note evidencing the refinancing of any
Payout Note or Promissory Note and Disclosure Statement which has
been guaranteed by SAC, or guarantee each extension of the maturity
date of an Approved Note provided, however, that SAC shall not be
obligated to guarantee any such Note or extension if SAC in its sole
discretion determines that the refinancing or extension, as the case
may be, is not in accordance with the terms of the underlying
Approved Note or the procedures and requirements of applicable law
and regulations, this Agreement, and the Procedural Handbook.
6. (a) In the event of a default in respect of any Approved Note, the
Lender shall follow the procedure set forth in the Procedural
Handbook. SAC does not guarantee payment by the borrower of any
delinquency charges imposed for late payment and will not
accept a default claim based solely on nonpayment of such
charges. Upon receipt from the Lender of a Notice of Default
together with the Note (guaranteed by SAC), the Loan
Application, and evidence of collection effort satisfactory to
SAC, SAC will pay to the Lender the full amount of the unpaid
balance of principal and interest due on such Note (other than
any portion of such interest payable by the U.S. Department of
Education under the Act) provided the Lender has complied in
all material respects with the procedures and requirements of
applicable law and regulations, this Agreement, and the
Procedural Handbook in respect of such Note. SAC shall
thereupon succeed to all the rights of the Lender under such
Note.
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(b) The liability of SAC as guarantor of any Approved Note in
accordance herewith shall not be affected by the fact that the
borrower was a minor at the time of his execution of the Note.
Upon the death or permanent and total disability of the
borrower, the borrower's liability will be discharged by SAC.
(c) Prior to submitting a default claim, the Lender is obligated to
make reasonable collection efforts against the borrower. For a
loan made with a co-maker, such collection efforts are required
in addition to any collection efforts the Lender may make
against the co-maker of the loan.
7. SAC covenants that it will at all times, so long as the Lender is the
holder of an Approved Note, hold and maintain a Guarantee Reserve
Fund, represented by cash and marketable securities having a market
value of not less than 1% of the aggregate amount of unpaid principal
and interest of all Approved Notes covered by Federal reinsurance
pursuant to an agreement between SAC and the U.S. Secretary of
Education.
8. (a) No change, other than the extension of the maturity date of a
Promissory Note and Disclosure Statement pursuant to paragraph 5
of this Agreement, shall be made in the terms of any Approved
Note, except with the prior written consent of SAC. Any such
change made without such consent shall have the effect, at the
option of SAC, of voiding SAC's guarantee of such Approved Note.
(b) If the Lender shall violate or fail to comply with any
applicable law or governmental regulation in respect of any
Approved Note, then the Lender hereby agrees to assume liability
for, and does hereby indemnify, protect and keep harmless SAC,
its successors, assigns, directors, officers, agents and
servants, from and against, any and all liabilities, losses,
damages, penalties, claims, actions, expenses and disbursements,
including legal fees and expenses, imposed on, incurred by or
asserted against them or any of them, in any way relating to or
arising out of such violation or failure to comply, regardless
of whether SAC shall have purchased such Approved Note from the
Lender.
9. SAC shall furnish to the Lender from time to time a certificate
as to the names and facsimile signatures of the officers
authorized to execute in its name and on its behalf guarantees
of Notes under this Agreement, and continue in full force and
effect until SAC shall have delivered to the Lender written
notice of revocation thereof. No recourse under or upon this
Agreement or any Approved Note or Guarantee thereof, shall be
had against incorporator, member, officer or trustee, as such,
past, present or future, of SAC or any successor corporation; it
being expressly understood that this Agreement and the
guarantees of Approved Notes are solely corporate obligations
and that no personal liability whatever shall attach to, or is
or shall be incurred by, the incorporators, members, officers,
or trustees, as such, of SAC or of any successor corporation, or
any of them, because of this Agreement or any Approved Note or
guarantee thereof.
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10. Any notice required or permitted by this Agreement shall be in
writing and shall be deemed to have been duly given if mailed,
first-class postage prepaid, addressed: (1) if to the California
Student Aid Commission, X.X. Xxx 000000, Xxxxxxxxxx XX 00000-0000
(2) if to the Lender, at the address indicated on page 6, or (3) at
such other address of which the party to be notified shall have
given notice as aforesaid.
11. This Agreement may be terminated by either party upon not less than
60 days written notice to the other party. Such terminations shall
not affect any obligation incurred pursuant to this Agreement prior
to the time that such termination notice becomes effective.
12. This Agreement shall inure to the benefits of and be binding upon
SAC and the Lender and their respective successors and assigns. This
Agreement supersedes all existing agreements between the parties
with respect to the subject matter hereof. This Agreement shall not
be varied by oral agreement, but only by an instrument in writing
duly executed by the parties hereto. Any waiver or modification,
expressed or implied, by SAC of any term or condition contained in
this Agreement shall operate as such only in the specific instance
and shall not be construed as a waiver or modification of any such
condition generally or in any other instance.
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12
IN WITNESS THEREOF, The California Student Aid Commission and the
Lender have each caused this instrument to be executed the 24th day of March
1997, by their respective duly authorized officers.
The First National Bank of Chicago
as Trustee for the
PNC Student Loan Trusts CALIFORNIA STUDENT AID COMMISSION
----------------------------------
Lender
/s/ XXXXXXX X. XXXXXX Assistant Vice President /s/
----------------------------------------------- -------------------------
Signature Title Authorized Signature
Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
------------------------------------
Xxxxxx Xxxxxxx
------------------------------------
Xxxx Xxxxx Zip
LID 833364
TIN 00-0000000
-----------------------------
Federal Identification Number
--------------------------------------------------------------------------------
FEDERAL REINSURANCE
Loans made pursuant to the Higher Education Act of 1965 and guaranteed by SAC
which go into default are reinsured under an agreement with the U.S. Secretary
of Education. Under that agreement, 100% of the losses from such defaults will
be borne by the U.S. Secretary of Education through Federal Fiscal Year
1982-83. For federal fiscal year 1983-84 and thereafter, 100% of the losses
from such default will be borne by the U.S. Secretary of Education except that:
(a) if, for any Federal Fiscal Year, the amount of such reimbursement payments
by the U.S. Secretary of Education exceeds 5% of the loans which are guaranteed
by SAC and which were in repayment at the end of the preceding fiscal year, the
amount to be paid SAC as reimbursed for such excess shall be equal to 90% of
the amount of excess, and (b) if, for any Federal Fiscal Year, the amount of
such reimbursement exceeds 9% of such loans, the amount to be paid as
reimbursement for such excess shall be equal to 80% of the amount of such
excess.
--------------------------------------------------------------------------------
RETURN TWO SIGNED COPIES TO CSAC: ONE SIGNED COPY WILL BE
RETURNED TO THE LENDER
CALIFORNIA STUDENT AID COMMISSION
LENDER SERVICES BRANCH
X.X. XXX 000000
XXXXXXXXXX, XX 00000-0000
CGSLP 820 (12/81)
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