EXHIBIT 10.6
EXHIBIT 10.6
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
NOTE: THIS AGREEMENT CONTAINS CONFIDENTIAL & PROPRIETARY INFORMATION AND MAY NOT
BE DISCLOSED WITHOUT THE CONSENT OF BOTH PARTIES OR AS REQUIRED BY LAW
GUARANTY AGREEMENT
BETWEEN
THE EDUCATION RESOURCES INSTITUTE, INC.
AND
BANK OF AMERICA, N.A.
This Guaranty Agreement (this "Agreement") is made as of this 30th day
of April, 2001, 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 of America, N.A. (the "LENDER"), a
national banking association organized under the laws of the United States and
having a place of business located at 000 Xxxxxxxx Xxxx, Xxx Xxxxxxx, XX 00000.
WHEREAS, The First Marblehead Corporation ("FMC") and Lender have
established the Bank of America/GATE Education Loan Programs (the "Program") to
assist 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 the LENDER and FMC, the LENDER
is the exclusive lender for the Programs, and has agreed to originate loans
conforming to the Programs ("Loans"); and
WHEREAS, pursuant to such agreements between the LENDER 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
higher education and their parents at XXXX-approved schools; and
WHEREAS, the LENDER 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.
1
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, XXXX and the LENDER 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 and Trust Company, its successors
and assigns, in its capacity as Agent under the Deposit and Security
Agreement between XXXX and the LENDER, of even date herewith.
1.2 "Borrower" shall mean the person, or all persons collectively,
including all students, cosigners, coborrowers, 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 the LENDER under the Program.
1.3 "Due Diligence" shall mean the utilization by the LENDER of policies,
practices and procedures in the origination, servicing and collection
of Loans that comply with the standards set forth in the Program
Guidelines, that comply with the requirements of federal and state law
and regulation, and, to the extent not inconsistent with the foregoing,
that are in accord with the LENDER's policies, practices and procedures
applicable to its other consumer loan and credit portfolios and with
sound lending practices utilized through the consumer lending industry.
1.4 "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,
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, the LENDER at TERI's
request will withdraw its guaranty claim unless or until one of the
other Guaranty Events shall have occurred with respect thereto.
1.5 "Loan" shall mean a loan of funds, including all disbursements thereof,
made by the LENDER under the Program.
2
1.6 "Note Purchase Agreement" means the agreement of that name between
LENDER and FMC dated as of April 30, 2001, as amended.
1.7 "Program Guidelines" shall mean (i) Underwriting, Origination and Loan
Term Guidelines for prepGATE Loan Program, Bank of America GATE
Undergraduate Loan Program, Bank of America GATE Graduate Loan program
and (ii) the XXXX Servicing Guidelines, and (iii) Specific Program
Summaries for prepGATE Loan Program, Bank of America GATE Undergraduate
Loan Program, Bank of America GATE Graduate Loan program, copies of
which are attached hereto as Exhibits A-C, 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.
1.8 "Promissory Note" shall mean a promissory note executed by a Borrower
evidencing a Loan, in the form of Exhibits L or M hereto or as approved
pursuant to Section 3.2 below.
1.9 "Securitization Transaction" shall mean and refer to a purchase of
Loans guaranteed hereunder by a special purpose entity formed by FMC,
which purchase is funded through the issuance of debt instruments or
other securities by such entity, the repayment of which is supported by
payments on the Loans.
SECTION 2: GUARANTEE OF LOANS
2.1 XXXX hereby guarantees to the LENDER, 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 the LENDER 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 the
LENDER stating the 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. The LENDER must have filed its claim for guaranty payment
within the time period and following the procedures specified
in the Program Guidelines.
b. The LENDER 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
requirements of the Program Guidelines applicable to the Loan.
3
c. The LENDER 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 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 the LENDER the original
Promissory Note, enforceable against the Borrower (except as
provided in this Section 2.2(d), below), endorsed to XXXX in
such manner as to transfer to XXXX all rights in and title to
such Promissory Note, 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 the LENDER'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 the
LENDER pursuant to a Loan Origination Agreement between the
parties, (i) XXXX will not deny the LENDER's guaranty claim on
such Loan if the sole basis for denial is a violation of the
Program Guidelines or a violation of Massachusetts or federal
law committed by XXXX in the origination process, and (ii)
XXXX will have no recourse against the LENDER in the event
that TERI's actions or omissions in the origination process
shall have given rise to a defense in favor of the Borrower in
a suit on the Promissory Note.
2.3 TERI's guaranty obligation with respect to any Loan shall not be
terminated or otherwise affected or impaired (i) by the LENDER's
granting an extension to the Borrower of time to make scheduled
payments, or by any other indulgence the LENDER 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 the LENDER's claim on any Loan on the grounds
of Due Diligence deficiencies, the LENDER may thereafter require that
XXXX reinstate the guaranty of such Loan if (a) the LENDER corrects
such deficiencies and receives four (4) consecutive full on-time
monthly payments from the Borrower, according to any schedule permitted
by the Program Guidelines, and if at the time of the LENDER's request
the Borrower is within thirty (30) days of being current on all
principal and interest payments on such Loan, or (b) the LENDER
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 the LENDER
4
prior to such termination; and shall not affect TERI's obligations to
the LENDER 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 XXXX will permit the LENDER, any duly designated representative of the
LENDER, or any governmental body having jurisdiction over the LENDER
(subject to written notice being provided to XXXX by the LENDER,
identifying the requesting party and the date of the review), to
examine and audit the books and records of XXXX pertaining to the
Loans, at any time during TERI's regular business hours, provided that
in the case of examinations by the LENDER or its representative absent
good cause (i) XXXX must be given ten (10) business days' prior written
notice and, (ii) no more than one such audit 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
July, August, September, or October in any year except at the request
of a regulatory authority having jurisdiction over the LENDER.
2.8 XXXX will indemnify the LENDER and hold it harmless from and against
any loss, cost, damage and expense that the LENDER may suffer as a
result of claims arising out of TERI's actions or omissions relative to
the LENDER's participation in the Program. "Expense" includes, without
limitation, the LENDER's reasonable attorney's fees. XXXX will further
indemnify the LENDER and hold it harmless from and against any claim
brought against the LENDER by any Borrower based on actions or
omissions of the LENDER that were mandated under the Program
Guidelines.
2.9 Although the LENDER agrees not to use any loan servicer not approved by
XXXX, the LENDER 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 the LENDER 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.
SECTION 3: OBLIGATIONS OF THE LENDER
3.1 In originating, servicing, disbursing, and collecting Loans, the LENDER
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.
3.2 The LENDER will use Promissory Notes, Loan applications, disclosure
statements, and other forms mutually agreeable to the parties. The
forms of application and Promissory
5
Note attached as Exhibits L and M hereto, and the forms of disclosure
statement attached hereto as Exhibits, are agreed to be satisfactory to
both parties. Without limiting the generality of Section 3.1, the
LENDER warrants the conformity of such instruments and any agreed
successors thereto with all legal requirements, other than those of
federal and Massachusetts law and regulation, applicable to Loans
originated by XXXX.
3.3 The LENDER will pay a guaranty fee for each Loan (the "Guaranty Fee")
as follows:
a. At the time of each disbursement of the Loan, the LENDER will
remit to XXXX [**] percent ([**]%) of the principal amount of
Loan disbursed (the "Initial Guaranty Fee").
b. At such times as are set forth in Exhibit K attached hereto
and incorporated herein by reference, such additional fees as
are set forth in the fifth and sixth columns of Exhibit K
("Subsequent Guaranty Fee"). If the terms of Exhibit K call
for any Guaranty Fees to be paid to XXXX or to the Agent
concurrent with the Securitization Transaction, LENDER may
elect either: (i) for LENDER to pay the fees directly (and be
reimbursed in the Securitization Transaction), or (ii) for the
purchaser to pay the fees directly. 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 the LENDER
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 by the LENDER 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. 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.
d. Anything in the Program Guidelines to the contrary
notwithstanding, if the LENDER is required under the terms of
a Promissory Note to refund all or part of 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 the LENDER upon
being so advised in writing.
e. For purposes of application and interpretation of Exhibit K,
LENDER and FMC (acting jointly) shall, from time to time,
propose to XXXX a list of those schools to be included on a
"preferred" list. Loans to finance education at those schools
will qualify for "preferred" fee levels shown on Exhibit K.
XXXX shall, within thirty
6
(30) days, approve or disapprove, in whole or in part,
proposals from FMC and LENDER.
f. In addition to the Subsequent Guaranty Fees shown in column 6
of Exhibit K, there shall be an additional Subsequent Guaranty
Fee payable at Securitization, as follows:
Loan Type Fee Amount
--------- ----------
Graduate Signature medical [**] percent of total loan
or dental greater than amount (exclusive of
$25,000 principal amount financed fees)
(exclusive of financed fees)
Graduate Signature other than [**] percent of total loan
medical and dental greater than amount (exclusive of
$18,500 principal amount financed fees)
(exclusive of financed fees)
3.4 If XXXX shall have purchased a Loan due to the occurrence or alleged
occurrence of a Guaranty Event described in Section 1.4.a and/or 1.4.b
above, the LENDER 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 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 above, if XXXX should determine that the
Loan does not meet the conditions set forth in subsection (b), (c) and
(d) of Section 2.2 above.
3.5 To the extent permitted by applicable law, the LENDER will deliver to
XXXX such reports, documents, and other information concerning the
Loans as XXXX may reasonably require, and permit independent auditors
or authorized representatives of XXXX, and 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 the LENDER's participation in the Program.
3.6 If the LENDER should violate any term of this Agreement, it will be
liable to XXXX for all loss, cost, damage, and expense sustained by
XXXX as a result. The LENDER 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 the LENDER's actions or
omissions relative to the LENDER's participation in the Program unless
such actions or omissions are specifically required by this Agreement.
The LENDER will similarly indemnify XXXX with respect to any defenses
arising from the LENDER's violation of or
7
failure to comply with any law, regulation, or order, or any term of
this Agreement, that may be raised by a Borrower to any suit upon a
Promissory Note. "Expense" includes, without limitation, TERI's
reasonable attorney's fees.
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
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 Each party represents and warrants to the other that its computer and
processing systems will (a) operate continuously without errors
relating to date information; (b) continue to function and will not
generate invalid or incorrect results as a result of date information,
including any date information representing dates from different
centuries or more than one century; and (c) have been designed to be
and in fact are, Year 2000 compatible such that (i) all data created or
stored by the software will be correct, regardless of the date
information contained therein or the date the data is created or
stored; (ii) all calculations performed will be correct regardless of
the date information used or the date the calculations are performed;
(iii) all date-related user interface functions and data fields include
a century indication; and (iv) all reports generated will include a
century indication.
5.3 The parties acknowledge that XXXX is not an insurer or reinsurer and
the LENDER 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 the LENDER 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.
8
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 the LENDER'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 Each of the parties will timely implement, if it has not already, and
will maintain, a reasonable disaster recovery plan. 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 Commonwealth of Massachusetts, 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) the LENDER may assign any Loan, together with the provisions
hereof as applicable to such Loan, to FMC or any SPE; (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, (c) LENDER
9
may assign this Agreement to an affiliate who is a national bank who
becomes a lender under the Bank of America/GATE Loan Programs.
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 the
LENDER, notices should be sent to Bank of America Student Banking
Group, 000 Xxxxxxxx Xxxx., 0xx Xxxxx, Xxx Xxxxxxx, XX 00000, Attention:
Xxxxxxxx Xxxxxx, and if by fax, to (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.
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. Accordingly, 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 fourth calendar quarter of each
year and shall conclude their discussions of any modifications by January 1 of
each calendar year. All modifications must be mutually acceptable. Any
modifications approved by the parties shall become effective on the following
March 1.
SECTION 8: TERM AND TERMINATION
8.1 The initial term of this Agreement shall commence on May 1, 2001, and
shall continue until June 30, 2002. Thereafter, this Agreement shall
automatically renew for successive one-year terms unless either party
provides written notice of non-renewal and termination not less that
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
March 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.
10
8.4 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 the LENDER 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 the LENDER 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. The LENDER acknowledges that XXXX will disclose the LENDER's
Confidential Information to First Marblehead Education Resources, Inc.
(FMER), to which XXXX has subcontracted its obligations under this
Agreement pursuant to Section 6.7(b) hereof, and with which the LENDER
is contemporaneously entering into a confidentiality agreement. Except
for such disclosure to FMER, XXXX will not disclose the LENDER's
confidential information to any third party other than a subcontractor
permitted under Section 6.7, an agent, or a consultant, and in any
event only as necessary to assist XXXX in carrying out its functions
under this Agreement, on a need-to-know basis, and under circumstances
that require the disclosee to refrain from redisclosure to any other
third party.
9.2 XXXX will not disclose to any third party, other than FMER, the name,
address, social security number, account number, or other personally
identifiable information of any applicant or Borrower. Nothing herein,
however, will prevent XXXX (or FMER as its subcontractor) from (i)
retaining and using such data as necessary for the operation of TERI's
guaranty business, or (ii) retaining and using on a non-exclusive basis
for any lawful purpose any or all aggregated and de-identified data
concerning Loan applicants and Borrowers which does not include the
name, address, social security number, account number, or other
personally identifiable information of any applicant or Borrower. XXXX
may sell, assign, transfer or disclose aggregated and de-identified
information to third parties including, without limitation, FMC, who
may also use such information for any lawful purpose.
IN WITNESS WHEREOF, XXXX and the LENDER have caused this instrument to
be executed by their duly authorized officers under seal as of the day and year
indicated above.
11
THE EDUCATION RESOURCES BANK OF AMERICA, N.A.
INSTITUTE, INC.
By: /Xxx X. Xxxxx/ By: /XX Xxxxxx/
--------------------------- ------------------------------
Print Name: Xxx X. Xxxxx Print Name: XX Xxxxxx
------------------- ----------------------
Title: Acting President Title: Sr Vice President
------------------------ ---------------------------
12
TABLE OF EXHIBITS
Exhibit A -- Underwriting, Origination and Loan Term Guidelines for prepGATE
Loan Program, Bank of America GATE Undergraduate Loan Program,
Bank of America GATE Graduate Loan program*
Exhibit B -- XXXX Servicing Guidelines*
Exhibit C -- Loan Program Definitions for prepGATE Loan Program, Bank of America
GATE Undergraduate Loan Program, Bank of America GATE Graduate
Loan program*
Exhibit D - [Intentionally Omitted]
Exhibit E - [Intentionally Omitted]
Exhibit F - [Intentionally Omitted]
Exhibit G - [Intentionally Omitted]
Exhibit H - [Intentionally Omitted]
Exhibit I - [Intentionally Omitted]
Exhibit J - [Intentionally Omitted]
* Exhibits superceded by the Amendments filed as Exhibits 10.3 - 10.7 to the S-1
filed with the SEC on September 5, 2003 (Registration No. 333-108531).
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