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EXHIBIT 4.13
NEW JERSEY HIGHER EDUCATION ASSISTANCE AUTHORITY
GUARANTY LOAN AGREEMENT
(SECONDARY MARKET)
This AGREEMENT is made this 21 day of March, 1997, by and between NEW
JERSEY HIGHER EDUCATION ASSISTANCE AUTHORITY, a body corporate and politic with
corporate succession, created by N.J.S.A. 18A:72-1 et seq., as amended, whose
office is located at 0 XXXXXXXXXXXX XXXXX, XX 000, XXXXXXX, XXX XXXXXX 00000
("Authority") and The First National Bank of Chicago as Trustee for the PNC
Student Loan Trusts with its principal office at Xxx Xxxxxxxx Xxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxxx 00000 ("Lender").
WHEREAS, Lender wishes to be able to secure guarantee of loans held by
Lender that have been made to or on behalf of students pursuing programs of
postsecondary education at eligible institutions pursuant to Title IV of the
Higher Education Act of 1965, as amended (the "Act"), regulations thereunder,
and applicable state law; and
WHEREAS, the Authority, which exists for the purpose of providing
assistance to students pursuing programs of postsecondary education at eligible
institutions as defined by the Act, regulations thereunder, and N.J.S.A. 18A:
72-1 et seq., is authorized to guarantee loans; and
WHEREAS, the Authority desires that Lender shall hold loans that have
been made to or on behalf of students, at Lender's option in each instance, the
Authority to guarantee the payment thereof upon the terms, conditions and
agreements herein contained;
NOW, THEREFORE, it is mutually agreed that:
1. Within such limits as may be set by the Act, regulations thereunder, New
Jersey statutes, regulations thereunder, and this AGREEMENT, the Authority
(i) shall guarantee loans with a first disbursement prior to October 1, 1993
no less than 100 percent of full amount of such loans, including principal
and interest, held by the lender, and (ii) shall guarantee loans with a
first disbursement on or after October 1, 1993 no less than 98 percent of
the full amount of all loans, including principal and interest, made by the
Lender, except that all loans continue to be 100 percent guaranteed in the
event of death, disability or bankruptcy, situations covered by Section
428(j) or Section 439(q) of the Act or other non-default claim (e.g., closed
school or false certification) regardless of disbursement date.
2. Whenever any guaranteed loan shall be in default (as defined by the Act,
regulations thereunder, New Jersey statutes, and regulations thereunder), or
upon the death or total and permanent disability of a borrower, or upon
bankruptcy, situations covered by Section 428(j) or Section 439(q) of the
Act or other non-default claim, the Authority shall purchase the loan,
provided that the loan was made in accordance with the Act, regulations
thereunder, New Jersey statutes, regulations thereunder; Lender has
exercised due diligence in the making, servicing, and collection of such
loan; Lender has subrogated title to the loan note to the Authority; and
Lender has otherwise performed its obligations under this AGREEMENT.
3. The Authority shall guarantee loans without regard to sex, age, race, color,
religion, handicapped status, income, national origin or any other basis
prohibited by applicable law and Lender shall not discriminate in the making
of loans to eligible borrowers, as defined by the Act and New Jersey
statutes, or in the treatment of such borrowers on any prohibited basis.
4. Lender shall provide notification to the Authority when it acquires a loan
for which the Authority has issued a notice of loan guarantee. Regarding a
guaranteed loan already held by Lender, in order for a loan account to
remain subject to the Authority guarantee obligation, the loan may be
transferred only to another approved lender or eligible holder of New Jersey
guaranteed loans.
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Secondary Market Loan Agreement
5. Lender shall notify the Authority of any servicing or management of
Lender's guaranteed loan portfolio performed by an agent(s) other than the
holder of record.
6. Payment of a loan may be extended in whole or in part, and the provisions
of the loan may be modified without notice to and without affecting the
liability of the Authority, if such extension or modification complies with
the requirements for loans under this AGREEMENT, the Act, regulations
thereunder, New Jersey Statutes, and regulations thereunder.
7. In holding or servicing guaranteed loans for or on behalf of eligible
borrowers, Lender shall assist them in securing such reductions in their
obligations to pay interest on loans held by the Lender as they may be
eligible to receive under the Act and regulations thereunder.
8. Lender shall maintain for all loans guaranteed a system of records and
accounts, shall afford access thereto, and shall furnish such periodic and
separate reports as may reasonably be required by the U.S. Department of
Education and the Authority, under the Act, regulations thereunder, New
Jersey statutes, and regulations thereunder. For loans paid in full or
otherwise discharged, Lender shall also maintain records as required by the
Act, regulations thereunder, New Jersey statutes, and regulations
thereunder. For example, Lender shall retain the records required for each
loan for not less than five years following the date the loan is repaid in
full by the borrower.
9. The Authority shall maintain at all times reserve levels which comply with
the Act, regulations thereunder N.J.S.A. 18A:71-1 et seq., and regulations
thereunder.
10. Failure of Lender to comply with the terms of this AGREEMENT with respect
to an individual loan or loans shall not invalidate the guarantee of the
Authority to Lender with respect to other loans held in compliance with the
terms of this AGREEMENT.
11. Lender agrees to comply with all applicable Federal and State statutes,
rules, and regulations, whether applicable presently or hereafter.
12. This AGREEMENT may be terminated by either party by giving thirty (30) days
notice in writing to the other party by certified mail. All rights and
obligations hereunder shall immediately cease upon termination, except the
rights and obligations of the parties which existed prior to the date of
such termination.
13. The Authority and Lender each represents to the other that it has the full
and unencumbered right to enter into this AGREEMENT and to fully perform
its obligations hereunder.
14. This AGREEMENT sets forth the entire agreement of the parties with respect
to any and all loans which may be made hereunder.
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Secondary Market Loan Agreement
15. If any provision of this AGREEMENT is invalid under the Act, regulations
thereunder, New Jersey statutes, or regulations thereunder, and the
invalidity shall not affect other provisions of this AGREEMENT which can be
given effect without the invalid provisions, then to this end, the
provisions of this AGREEMENT are severable.
16. This AGREEMENT is to be interpreted under the laws of the State of New
Jersey.
IN WITNESS WHEREOF, the parties have caused this AGREEMENT to be executed
by their duly authorized representatives, and their respective seals to be
affixed, as of the dates indicated below.
Date: March 21, 1997 NEW JERSEY HIGHER EDUCATION
---------------------------- ASSISTANCE AUTHORITY
By: /s/ Xxxxxxxxxx Xxxxxxxxx
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Xxxxxxxxxx Xxxxxxxxx
Title: Secretary/Treasurer
Date: _____________________________ The First National Bank of Chicago, as
Trustee for the PNC Student Loan Trusts
By: /s/ Xxxxxxx X. Xxxxxx
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Title: Assistant Vice President
O.E. Code: 833364
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EIN Code: 00-0000000
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