Exhibit 10.14
CALIFORNIA STUDENT AID COMMISSION
0000 X Xxxxxx, Xxxxx 000, Xxxxx Xxxxxxxx
XX Xxx 000000, Xxxxxxxxxx, XX 94245-0845
(000) 000-0000
CONSOLIDATION LOAN PROGRAM
LENDER PARTICIPATION AGREEMENT
WHEREAS First Bank National Association as Trustee for Education Loans, Inc.,
herein referred to as the "Lender", wishes to participate in a program of
Consolidation Loans for eligible borrowers under Title IV, Parts B and E, of the
Higher Education Act of 1965, as amended, and under Subpart II of Part C of
Title VII of the Public Health Services Act, and
WHEREAS the CALIFORNIA STUDENT AID COMMISSION, herein referred to as the
"Agency", having found that the Lender qualifies under the provisions of such
Act,
THEREFORE, it is agreed by the Agency and the Lender as follows:
1. The lender is currently a Lender with the Agency for Guaranteed
Student Loans and/or PLUS and Supplemental Loans for Students.
2. Within such limits as may be set by it, the Agency shall insure all
Consolidation Loans made by the Lender which are eligible for such
reinsurance under such Acts and the Regulations issued thereunder,
which Acts and Regulations, as they may from time to time be amended,
are made a part of this agreement.
3. The Lender shall verify that an eligible borrower has no other
application pending for a Consolidation Loan and must hold at least
one of a borrower's eligible loans for consolidation OR obtain from
the borrower a certification that the borrower has been unable to
obtain a Consolidation Loan from the holders of his/her outstanding
loans selected for Consolidation.
4. The Lender must meet the applicable guidelines set forth in Section
428C of the Higher Education Act Amendments of 1986, including the
provisions that:
a) each Consolidation Loan will bear interest at the weighted
average of the loans consolidated, rounded to the nearest whole
percent, but not less than 9%;
b) repayment of each Consolidation Loan may be graduated or income
sensitive, but the sum of the Consolidation Loan and the amount
outstanding on other student loans to the individual must be
considered in determining repayment according to the following
schedule:
TOTAL LOANS YEAR TO REPAY
----------- -------------
$ 5,000 - $ 7,499 10
$ 7,500 - $ 9,999 12
$10,000 - $19,999 15
$20,000 - $44,999 20
$45,000 and up 25
1
c) each Consolidation Loan will be made in an amount not less than
$5,000 and in an amount equal to the sum of the unpaid principal
and accrued unpaid interest and late charges of all loans
selected by the borrower for Consolidation.
5. The proceeds of the Consolidation Loan will be paid by the Lender to
the holder(s) of the loans selected for Consolidation to discharge the
liability of such loans.
6. The lender agrees to follow such other terms and conditions as the
Secretary or Agency specifically require to carry out the
Consolidation Loan Program.
7. If the Lender no longer intends to make Consolidation Loans under this
Agreement, it shall be terminated 60 days after receipt of the
request. This Agreement may also be terminated by the Agency in a
manner provided for by Regulation. The termination of this Agreement
shall not affect the coverage of loans under guarantee issued prior to
such termination.
8. The lender shall attach to the Certificate of Insurance, as Appendix
A, a statement of the alternative repayment terms it will offer to
borrowers, and agrees to update such Appendix should it change its
policy.
2
IN WITNESS THEREOF, the California Student Aid Commission and the Lender have
each caused this instrument to be executed the 6 day of July, 1997, by their
respective duly authorized officers.
First Bank National Association
as Trustee for Education Loans, Inc. California Student Aid Commission
------------------------------------
Lender
/s/ Xxxx Xxxxxxxx /s/
------------------------------------ ---------------------------------------
Signature X. Xxxxxx Xxxxxxx
Deputy Director, Financial Aid Services
California Student Aid Commission
Xxxx Xxxxxxxx
------------------------------------
by (print name)
Senior Vice President
------------------------------------
Title
000 Xxxxxx Xxxxxx South
------------------------------------
Street Address
Minneapolis, MN 55402
------------------------------------
City State Zip Code
00-0000000
------------------------------------
Federal Employer ID Number
833405
-----------------------------------
USDE Lender Code
RETURN TWO SIGNED COPIES ONE SIGNED COPY WILL BE
TO CSAC: RETURNED TO THE LENDER
California Student Aid Commission
Loan Services Branch
P.O. Box 510625
Sacramento, CA 94245-0625
3
CALIFORNIA STUDENT AID COMMISSION
0000 X Xxxxxx, Xxxxx 000, Xxxxx Xxxxxxxx
XX Xxx 000000, Xxxxxxxxxx, XX 94245-0845
(000) 000-0000
CALIFORNIA STUDENT AID COMMISSION
CERTIFICATE OF COMPREHENSIVE INSURANCE
(for Consolidation Loans made in accordance with Title IV,
Part B of the Higher Education Act of 1965, as amended)
THE CALIFORNIA STUDENT AID COMMISSION, herein referred to as the "Agency",
certifies that all Consolidation Loans made by FIRST BANK NATIONAL ASSOCIATION
AS TRUSTEE FOR EDUCATION LOANS, INC., herein referred to as the "Lender", in
conformity with the requirement of Part B of Title IV of the Higher Education
Act of 1965, as amended, are fully insured against loss of principal and
interest provided:
1. The Lender has determined to its satisfaction, in accordance with
reasonable and prudent business practices, for each loan being
consolidated:
a) that the loan is a legal, valid, and binding obligation of the
borrower;
b) that each such loan was made and serviced in compliance with
applicable laws and regulations; and
c) that the insurance on such loan is in full force and effect.
2. This certificate shall apply to loans made after April 21, 1997 and prior
to the expiration of the authority in Section 428C of the Act to make and
insure consolidation loans.
3. That the total unpaid principal amount of all Consolidation Loans made
under this certificate is equal to or less than $100,000,000.
4. That, if the lender, prior to the expiration of this certification no
longer proposes to make Consolidation Loans, the Lender will so notify the
Agency in order that the certificate may be terminated. Such termination
shall not affect the insurance on any Consolidation Loan made prior to such
termination.
5. That the Lender's loan consolidation program practices are subject to the
Agency's guaranteed Loan Program Lender Participation Limitations,
Suspension or Termination procedures. The insurance on any Consolidation
Loans made under this certificate prior to the Agency's imposition of a
limitation, suspension or termination action shall not be affected by such
action.
6. That the Lender complies with the Agency's and US Department of Education's
reporting and due diligence requirements.
7. That the Lender attaches to this Certificate, as appendix A, a statement of
the alternative repayment terms which it will offer to borrowers.
--------------------------------
AGENCY OFFICIAL
------------------------
DATE
CALIFORNIA STUDENT AID COMMISSION
0000 X Xxxxxx, Xxxxx 000, Xxxxx Xxxxxxxx
XX Xxx 000000, Xxxxxxxxxx, XX 94245-0845
(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
First Bank National Association as Trustee for Education Loans, Inc.
(Name of Institution)
Minneapolis, MN
(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 of the initial loan which the Lender
makes, causes to be made or acquires 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
(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.
Eligible Educational Institution: Any institution of post-secondary
education which is an "eligible institution" under the Act
and is eligible under the CGSLP.
1
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, andvvvvvvvvvvv
(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.
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,
(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 XXX.
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
2
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.
(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 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 collect 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.
3
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 SAC hereby warrants to the Lender that the Authority so
certified shall 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.
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, P.O. Box 510625, Sacramento CA 94245-0625 (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.
4
IN WITNESS WHEREOF, The California Student Aid Commission and the Lender
have each caused this instrument to be executed the 10th day of July, 1997, by
their respective duly authorized officers.
First Bank National Association as CALIFORNIA STUDENT AID
Trustee for Education Loans, Inc. COMMISSION
-------------------------------------
Lender
/s/ Xxxx Xxxxxxxx Xx. Vice President /s/
------------------------------------- ----------------------------------
Signature Title Authorized Signature
000 Xxxxxx Xxxxxx South
-------------------------------------
Street Address
Minneapolis, MN 55402
-------------------------------------
City State Zip
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
LOAN SERVICES BRANCH
P.O. BOX 510625
SACRAMENTO, CA 94245-0625
5
CALIFORNIA STUDENT AID COMMISSION
0000 X Xxxxxx, Xxxxx 000, Xxxxx Xxxxxxxx
XX Xxx 000000, Xxxxxxxxxx, XX 94245-0845
(000) 000-0000
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
First Bank National Association as Trustee for Education Loans, Inc.
(Name of Institution)
Minneapolis, MN
(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 of the initial loan which the Lender
makes, causes to be made or acquires 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.
Eligible Educational Institution: Any institution of post-secondary
education which is an "eligible institution" under the Act and
is eligible under the CLAS Program.
1
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
(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.
2
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 XXX.
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, 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
3
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.
(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
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 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
4
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, P.O. Box 510625, Sacramento CA 94245-0625 (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.
5
IN WITNESS WHEREOF, The California Student Aid Commission and the Lender
have each caused this instrument to be executed the 10th day of July, 1997, by
their respective duly authorized officers.
First Bank National Association as CALIFORNIA STUDENT AID
Trustee for Education Loans, Inc. COMMISSION
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Lender
/s/ Xxxx Xxxxxxxx Xx. Vice President /s/
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Signature Title Authorized Signature
000 Xxxxxx Xxxxxx South
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Street Address
Minneapolis, MN 55402
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City State Zip
00-0000000
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Federal Identification Number
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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
P.O. BOX 510625
SACRAMENTO, CA 94245-0625
CALIFORNIA STUDENT AID COMMISSION
0000 X Xxxxxx, Xxxxx 000, Xxxxx Xxxxxxxx
XX Xxx 000000, Xxxxxxxxxx, XX 00000-0845
(000) 000-0000
ADDENDUM TO CONSOLIDATION LOAN PROGRAM
LENDER PARTICIPATION AGREEMENT
THIS ADDENDUM is entered into as of the 30th day of June, 1997, by and between
the CALIFORNIA STUDENT AID COMMISSION, an educational corporation created by act
of the Legislature of the State of California with its principal office in
Sacramento, California (herein called the "Agency"), and FIRST BANK NATIONAL
ASSOCIATION AS TRUSTEE FOR EDUCATION LOANS, INC. (MINNESOTA STATE), a banking
association organized and existing under the laws of the State of Minnesota with
its principal office located in Minneapolis, Minnesota (hereinafter called the
"Lender").
WITNESSETH:
WHEREAS, prior to the execution of this Addendum (hereinafter called the
"Addendum"), the Agency and the Lender entered into a Consolidation Loan Program
Lender Participation Agreement to guarantee loans (hereinafter called the
"Agreement"); and
WHEREAS, the Agency and the Lender desire to modify the Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants contained in this Addendum and of other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties agree as
follows:
1. Definitions: As used herein capitalized terms shall be defined as
above, as defined in the Agreement, or as defined as follows:
"Act": Parts B and E of Title IV of the Higher Education Act of 1965
(20 U.S.C. Section 1071 et seq.) and Subpart II of Part C of Title VII
of the Public Health Services Act, as amended and in effect from time
to time, or any successor enactments thereto, and the effective
administrative regulations promulgated thereunder.
"Borrower": An eligible borrower under the terms of the Act who is the
maker of a Note and who obtains a Consolidation Loan in accordance
with the Act, the Guarantee Certificate, the Agreement and this
Addendum.
"Consolidation Loan": A disbursement of money contingent upon an
agreement to repay by the borrower made by the Lender pursuant to the
Act, the Guarantee Certificate, the Agreement and this Addendum.
"Consolidation Loan Program": The system of procedures and policies
governing the implementation and maintenance of each Consolidation
Loan guaranteed under the provisions of the Act, applicable law and
regulations and as otherwise agreed to by and between the Lender and
the Agency in accordance with this Agreement.
"Default": With respect to any Note, the occurrence of any event which
shall constitute a Default under the terms of such Note.
Addendum
Page 2
"Eligible Lender": A lender entitled to participate in the
Consolidation Loan Program under the terms and conditions as
administered by the Agency.
"Guarantee": An obligation of the Agency to pay the Lender the unpaid
principal balance and accrued unpaid interest of a Consolidation Loan
made pursuant to the Act and the Guarantee Certificate.
"Guarantee Certificate": The certificate of comprehensive insurance
coverage issued by the Agency to the Lender in accordance with Section
482C(b)(2) of the Act.
"Note": A promissory note of a Borrower of a Consolidation Loan
approved by the Act which meets the criteria set forth in the Act.
2. Amendments to Agreement.
(a) In the first line of Paragraph (2) of the Agreement, the words
"such limits as may be set by it" are hereby replaced by the
words "the terms of the Procedural Handbook".
(b) Paragraph 6 is hereby deleted.
(c) Paragraph 7 is hereby deleted and replaced by the following:
Except with respect to Consolidation Loans which have been
guaranteed by the Agency and continue to be outstanding under the
Agreement, the Agreement and this Addendum may be terminated by
either party with or without cause, as provided for by such
regulations as the U.S. Secretary of Education may adopt, upon
not less then ninety (90) day written notice to the other party.
Such termination shall not affect any notes which are outstanding
or duties hereunder prior to the effective date of the
termination notice.
3. Financial Statements. The Agency shall provide the Lender its audited
annual financial statements within 135 days of the end of its fiscal
year, and its U.S. Department of Education quarterly reports
simultaneously with their delivery to the U.S. Secretary of Education.
4. Reserve Fund. The Agency covenants that it will at all time, so long
as the Lender is the holder of an approved Note, hold and maintain a
Reserve Fund, represented by cash and marketable securities having a
market value of not less than one percent (1 %) of the aggregate
amount of unpaid principal and interest of all outstanding approved
Notes covered by Federal reinsurance pursuant to an agreement between
the Agency and the U.S. Department of Education under the Act. The
Agency shall hold, maintain and invest such cash and marketable
securities in the same manner as a reasonably prudent trustee
similarly situated to the Agency.
5. Successive Interest and Assignability. The Agreement and this
Addendum shall inure to the benefit of and be binding upon the Agency,
the Lender and their
Addendum
Page 3
respective successors; provided, however, that the Agreement and this
Addendum are not assignable by either party hereto, either in whole or
in part, without the prior written consent of the other party. The
request of the Lender to assign Consolidation Loans to any Eligible
Lender as defined under the Act shall not be unreasonably denied.
6. Transfer of Guarantee. In the event the Lender sells the Consolidation
Loans insured under The Guarantee Certificate to an Eligible Lender,
the Agency shall transfer it's Guarantee and Guarantee Certificate to
the purchaser of such loans.
7. Written Modification. Both the Agreement and this Addendum shall not
be varied by oral agreement but only by an instrument in writing duly
executed by both parties.
8. Notices. Any notice required or permitted by the Agreement or this
Addendum shall be in writing and shall be deemed to have been given
upon deposit if mailed first class, postage prepaid, and addressed,
(i) if to the California Student Aid Commission, California Loan
Programs, P.O. Box 510625, Sacramento, CA 94245-0625, (ii) if to the
Lender, First Bank National Association as Trustee for Education
Loans, Inc., 000 0xx Xxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000 or,
(iii) at such other address the party to be notified has designated
upon reasonable notice.
9. Enforceability of Agreement and Remedies.
(a) Any provision of the Agreement or this Addendum which is
prohibited, unenforceable, or not authorized in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of
such prohibition, unenforceability, or non-authorization without
invalidating the remaining provisions hereof or affecting the
validity, enforceability, or legality of such provision in any
other jurisdiction.
(b) No failure on the part of either party to exercise, and no delay
exercising, any right hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
10. Limited Recourse. No recourse under or upon the Agreement or this
Addendum or any claim based thereon or in respect thereof shall be had
against any incorporator, member, officer, employee or trustee, as
such, past, present or future, of the Lender or of the Agency or of
any successor organizations, either directly or through the Lender or
the Agency or any successor organizations. The Agreement or this
Addendum is solely a corporate obligation and no personal liability
against any incorporator, member, officer, employee or trustee, past,
present or future of the parties shall attach through the Lender or
the Agency or any successor corporations, because of the Agreement or
this Addendum or any Note or Guarantee thereof.
Addendum
Page 4
11. Notice to Agency Upon Transfer or Sale of Note. If the Lender or any
other Eligible Lender purchases, sells, assigns, or pledges any Notes
guaranteed by the Agency under the Agreement, this Addendum or any
other agreement, it must notify the Agency within 30 days of such
transaction.
12. Governing Law. The Agreement and this Addendum shall be governed by
and construed under the laws of the State of California.
13. Entire and Complete Understanding. The Agreement and this Addendum
represent the entire understanding of the parties with respect to
their subject matter, and supersede all previous writing,
correspondence, and memoranda with respect thereto, and no
representations, warranties, agreements or covenants, expressed or
implied, of any kind or character whatsoever with respect to such
subject matter have been made by either party to the other, except as
herein expressly set forth.
IN WITNESS WHEREOF, the Commission and the Lender have each caused this
instrument to be executed as of the date first written above, by their
respective duly authorized officers as of the date first indicated herein.
Attest: CALIFORNIA STUDENT AID COMMISSION
VICE PRESIDENT By /s/
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Title: Title:
Attest: FIRST BANK NATIONAL ASSOCIATION AS
TRUSTEE FOR EDUCATION LOANS, INC.
/s/ Xxxx X. Xxxxxxxx By /s/ Xxxx Xxxxxxxx
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Title: Vice President Title: Senior Vice President
