EXHIBIT 10.3
CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT. THE SYMBOL "[****]" HAS BEEN INSERTED IN PLACE OF THE PORTIONS SO
OMITTED.
CONSOLIDATION LOAN ORIGINATION RESPONSIBILITY AGREEMENT
This Consolidation Loan Origination Responsibility Agreement dated as of
December 3, 2002 ("Agreement") is by and between COLLEGIATE FUNDING SERVICES,
L.L.C. ("CFS"), and The Brazos Higher Education Service Corporation, Inc., with
its principal office located at 0000 Xxxxxxxxxx, Xxxx, XX, X.X. Xxx 0000, Xxxx,
XX 00000, acting on behalf of one or more affiliates in conjunction with an
eligible lender trustee ("Lender").
CFS and the Lender hereby agree as follows:
1. Purpose:
The purpose of this Agreement is to establish terms under which the
parties agree to operate with respect to the marketing, servicing and
funding of the Real World Consolidation Loan Program (the "RWCL Program")
and supercedes the Real World Consolidation Loan Program Origination
Responsibility Agreement between Collegiate Funding Services, L.L.C. and
The Brazos Higher Education Services Corporation, Inc. dated as of
February 1, 2001.
The following provisions establish the terms, conditions and
responsibilities of CFS and the Lender with respect to the Lender's
funding of Consolidation Loans guaranteed under the requirements of the
Higher Education Act of 1965, as amended.
2. Eligible Loans:
Borrower accounts processed under the RWCL Program must consist of: at
least one federal loan qualifying for Federal Consolidation as defined
under Section 428 C of the Higher Education Act.
3. Definitions:
Unless the context clearly indicates otherwise, the terms set forth below
shall have the following meanings:
A. "ACT" means Title IV, Parts B, F and G of the Higher Education Act
of 1965 (20 USC Sec. 1071 et. seq.), as amended and in effect from
time to time, or any successor enactment thereto, the effective
administrative regulations promulgated thereunder, and any binding
directives issued by the Secretary of Education pursuant thereto.
B. "APPLICATION" means an application for a Consolidation Loan.
C. "BORROWER" means an individual who is the maker of a Note.
D. "BORROWER FILE" means, with respect to any Loan, all documentation
that is required by the Guarantor of such Loan for the payment of a
Default claim. Without limiting the generality of the foregoing,
such documentation shall at a minimum include:
(1) the Borrower's Application for such Loan;
a. the original Note (or certified copy thereof); and
b. an original or imaged copy of a Loan Consolidation
Verification Certificate ("LCVC").
E. "BUSINESS DAY" means any day, other than a Saturday, a Sunday or a
day on which banks located in the Commonwealth of Virginia are
required or authorized by law to remain closed. Any other references
to "days" shall mean calendar days.
F. "CONSOLIDATION LOAN" means a Loan made pursuant to Section 428 C of
the Act.
G. "DEFAULT" means, with respect to any Note, the occurrence of any
event which shall constitute a default or other grounds for filing a
Guarantee claim under the terms of the Act.
H. "DEFERMENT" means the period defined by the Act and applicable
Regulations during which a Borrower (in Repayment) may postpone
making payments.
I. "FORBEARANCE" means the period permitted by the Act and the policies
of the Guarantor during which a Borrower (in Repayment) is permitted
to temporarily forego payments or make reduced payments.
J. "GUARANTEE" or "GUARANTEED" means a written commitment by a
Guarantor to pay the Lender the unpaid principal balance plus
accrued unpaid interest of a Loan or any portion thereof upon
submission of a valid default, death, disability, or bankruptcy
claim or claim with respect to any other event or circumstance for
which a claim would be paid under the Act, in accordance with the
Act and applicable Regulations.
K. "GUARANTOR" means any state or private nonprofit organization that
has entered into agreements with the Secretary to Guarantee Loans
under the Act.
L. "LOAN" means a loan of money (which may be disbursed in one or more
installments) to or on behalf of a Borrower, contingent upon an
agreement to repay, evidenced by a Note, which Loan was originated
in accordance with this Agreement and is a Consolidation Loan under
the FFELP programs.
M. "NOTE" or "PROMISSORY NOTE" means a promissory note executed by a
Borrower for a Loan set forth on the appropriate form furnished or
approved by a Guarantor, which Note meets the criteria set forth by
the Act and applicable Regulations.
N. "ORIGINATION SERVICES" means all processes and duties contemplated
to be performed by the Servicer under this Agreement.
O. "REGULATIONS" means any regulations rules, policies or procedures
promulgated by a Guarantor or the Secretary.
P. "SECRETARY" means the Secretary of Education, United States
Department of Education, or any predecessor or successor to the
functions thereof under the Act.
Q. "SERVICER" means any loan servicer identified by Lender as the
designated loan servicer of any Loan or Loans originated under the
Agreement. If CFS creates, acquires, or designates a servicer
capable of servicing Consolidation Loans, which shall include the
ability to support securitization reporting, Lender shall enter into
a servicing agreement (or amend an existing contract with another
servicer if one already exists) with that servicer and that servicer
shall become the Servicer under this Agreement and shall remain the
Servicer for the life of the Loan unless otherwise directed by CFS.
R. "SPECIAL ALLOWANCES" means those amounts which are payable with
respect to a Loan by the Secretary under Section 438 of the Act or
any payment of a similar nature prescribed by law hereafter adopted.
S. "SUCCESSFULLY COMPLETED APPLICATION" means an application for a
Consolidation Loan from an eligible Borrower in which CFS submits
all of the required documentation to Lender to make the Loan,
regardless of whether it is actually funded or not.
4. Responsibilities of CFS:
CFS will act as Marketing Agent for Lender with respect to marketing
Consolidation Loans. As the marketing agent, CFS will source potential
applicants, receive Applications from Borrowers, review the documentation
and perform data entry of certain information required to complete the
consolidation process. CFS will be responsible for insuring that each
Application submitted for a Consolidation Loan is eligible in all respects
to be consolidated. CFS and the Lender hereby agree that the Servicer and
the Lender may rely fully upon CFS's certification of eligibility with
respect to all actions required of any party other than Servicer or the
Lender prior to consolidation. Furthermore, CFS shall:
A. Perform data entry of information required of Servicer to secure
required approvals from the Guarantor of the Loan, and to transfer
such information to Servicer on or before 8:00 a.m. on the business
day CFS desires disbursement of the Loan. Each such transfer of data
will constitute certification by CFS that it
has complied with its obligations under this Agreement with respect
to each Loan for which such file is transmitted to Servicer.
B. Ensure that each Borrower File is complete and accurate, and that
the Application meets all requirements for eligibility for
consolidation under the Act, implementing published regulations, and
the requirements of the Guarantor of the Loan as specified by the
Lender.
C. Ensure accuracy and completeness of any electronically transmitted
data, and send corresponding Borrower Files for each Loan funded by
the sixth Business Day after the date the Loan is funded.
D. Provide any missing documentation or information and promptly
correct any error identified by the Servicer or the Lender as being
required to have the loan Guaranteed.
E. Maintain all license and other governmental approvals and otherwise
comply with the Act, applicable laws and regulations necessary to
perform the activities hereunder.
F. Act as custodian and bailee for the Lender with respect to all
original documents for Loans until all such documents are
transferred to Servicer.
G. Subject to Section 8 of this Agreement, reimburse the Lender to the
extent of the principal balance, outstanding interest and fees paid,
any Loan deemed by a Guarantor to be uninsured after consolidation,
provided that the loss or absence of the Guarantee is a result of
CFS's breach of its obligations under this Agreement. CFS's
reimbursement obligation under this paragraph is unconditional and
not subject to offset or recoupment. All reimbursement payments
shall be made within two Business Days after Lender's delivery of
written demand to CFS and shall be in an amount equal to the
outstanding principal amount and all accrued but unpaid Borrower
interest on the Loans repurchased, unamortized fees paid, and any
Special Allowances to which the Lender would have been entitled to
receive with respect to such Loan but for CFS's action or failure to
act or lack of documentation.
H. From and after the effective date of this Agreement, CFS agrees to
indemnify and save the Lender harmless of, from and against any and
all loss, cost, damage or expense, including reasonable attorney's
fees incurred by reason of any breach of CFS's warranties,
covenants, agreements or representations hereunder, any false or
misleading representations of CFS, any failure to disclose any
matter which makes the warranties and representations herein
misleading, any accuracy in any information furnished by CFS in
connection herewith, or any negligence or willful misconduct of CFS
in connection with its duties and responsibilities as set forth and
contemplated under this Agreement.
I. Lender agrees that CFS has the option to provide disbursement
services for Lender on all Consolidation Loans that are funded by
Lender under this Agreement.
5. Responsibilities of the Lender:
Lender will perform the duties and adhere to the responsibilities outlined
in this Agreement and shall be obligated to provide daily disbursement for
all loans offered by CFS under this Agreement.
6. Responsibilities of the Servicer:
Any Servicer retained by Lender to service Loans funded under this
Agreement from time-to-time shall:
A. Promptly upon receipt of the electronic or paper data for a Loan CFS
provides under Section 4.A., perform the actions necessary to
prepare such Loans for loading to the Servicer's system and
authorize disbursement by the Lender. The funding authorization
shall be in a form acceptable to the Lender and will be faxed by the
Servicer to the Lender (with the original to be forwarded later) at
least 30 minutes prior to the latest time the Lender may initiate
its electronic funding transaction, provided that:
(1) The data provided electronically by CFS contains no errors or
problems that cause undue or unexpected delays;
(2) CFS has given Servicer at least 15 days prior written notice
of additional Guarantors or one day's prior written notice to
Servicer via fax or other electronic transmission of other
payees to whom funds must be disbursed; and
(3) CFS has given at least two days notice of any significant
increase in either the number of Loans or the number of
disbursements to be processed or of any other special
circumstance that could cause delay.
B. The Servicer shall, promptly upon receipt of each file, undertake
its obligation with respect to such files and begin reviewing the
file for each Loan to confirm the following:
(1) the original LCVC or an imaged copy of the LCVC is present and
signed by a representative of the owner of the Loans being
consolidated, or by any agent representing the owner and
authorized to execute the LCVC on behalf of the owner.
(2) Application/Promissory Note is present and signed by the
Borrower. The Servicer shall have no obligation to verify the
actual signature of the Borrower.
C. Servicer shall, upon funding, convert the Loans to its servicing
system and commence repayment servicing.
D. Servicer shall immediately inform the Lender and CFS in writing of
any Loan determined to be uninsured as a result of actions or
failure to act by CFS or any other party.
E. Servicer's obligations under this Section 6 shall be in addition to
and not in lieu of its obligations under any servicing agreement and
custodian agreement between the Servicer and the Lender. This
Agreement shall in no way limit Servicer's obligations under any
servicing agreement or custody agreement.
F. Servicer will process any required LCVC and follow-up with current
holders to complete any additional loan(s) for the Borrower for
Borrower requests to add eligible loans to their Consolidation Loan.
G. Servicer must be capable of administering multiple Borrower benefit
plans including but not limited to those detailed in Section 12,
graduated and extended repayment plans, ACH benefits and forms,
spousal loan consolidations and any deferment, forbearance or
adjustments requested by the Borrower and permitted by the Act.
Servicer must be capable of administering all CFS Borrower benefit
plans described in this paragraph.
H. Servicer must have the capability to request a blanket guaranty
through electronic transmission with any Guarantor.
7. Insurance:
CFS shall obtain and maintain in force until all Loans that Lender funds
hereunder are repaid in full or paid as a claim by a Guarantor, and upon
the request of the Lender furnish proof of, errors and omissions and
liability insurance policies acceptable to the Lender providing coverage
per occurrence (with not more than $50,000 deductible), with respect to
claims by Lender, arising from CFS's failure to perform any of its
responsibilities under the Agreement, each in an amount of at least
$1,000,000. Such policy shall be maintained with an insurer rated not
lower than A- by A.M. Best Co., and shall provide that the policy cannot
be canceled or modified without at least 60 days written notice to Lender.
The policy shall not be amended or modified in any manner which limits,
restricts, or conditions the coverage provided, decreases the amount of
coverage or increases the deductible, or in any other way reduces the
coverage provided, without the prior written consent of Lender.
8. Reimbursement Procedure:
A. If the Lender believes that CFS is obligated to reimburse it for any
Loan pursuant to Section 4.G. hereof, the Lender shall:
(1) Notify CFS in writing of the reason for CFS's obligation to
reimburse along with documentation from the Guarantor
detailing the basis for such
notice and CFS shall have 90 days after receipt of such notice
to reimburse such Loan.
(2) In the case of notice from Servicer, notify the Lender, in
writing, of the reason for CFS's obligation to reimburse and
follow Lender's instructions with respect to the Loan, any
extension of the cure period or other actions determined to be
appropriate by the Lender.
B. Purchase of Consolidated Loan - If an error occurs after the CFS
transmission of a Successfully Completed Application, and the Lender
is not able to correct the error to the satisfaction of CFS, the
Lender will allow CFS to repurchase the Consolidation Loan at the
fee paid to CFS by Lender under in Section 13.
9. Loan Application Average Balance:
Borrowers must have Loan indebtedness of at least [****]. CFS agrees to
maintain an average quarterly application size of [****] that the Lender
will review quarterly. Should the average Application amount remain below
[****] for two consecutive quarters, the Lender reserves the right to
limit or cease funding after giving CFS 90 days written notice of its
intention to do so.
10. Eligible Guarantor and Servicer:
CFS shall have the right to designate the Guarantor or Guarantors and
Servicer or Servicers for the Loans. The Lender shall enter into an
agreement with said designated Guarantor(s) and Servicer(s) prior to the
processing of any Loans under this Agreement. If CFS does not exercise its
right to designate the Guarantor(s) and/or Servicer(s), then:
A. Any Guarantor(s) selected by the Lender must have the capability of
accepting and administering national guarantees, same-day blanket
guarantee for servicer forwarded electronic borrower files, and
spousal loan consolidations. Lender shall also communicate to CFS
any Guarantor changes/amendments to the Guarantor's current process
and procedures that may affect the guarantee of any Loan.
B. The Servicer(s) must be able to meet requirements as described in
Section 6.
11. Funding:
The Lender agrees to fund eligible Loans offered by CFS up to but not
exceeding [****] for the Initial Term of this Agreement.
The funding shall begin within a reasonable time but no later than
December 31, 2002 unless all contracts necessary for funding have not been
executed by all the appropriate parties.
12. Borrower Benefits:
The Lender agrees to provide incentives described in this Section 12 to
Borrowers of Consolidation Loans made under the RWCL Program to pay their
Loans in a timely manner.
PLAN A: Under Borrower Incentive Plan A, after making the first 60 monthly
scheduled payments on-time, Borrowers shall receive a reduction in their
interest rate of up to but not greater than 1%.
PLAN B: Under Borrower Incentive Plan B, after making the first 36 monthly
payments on-time, Borrowers shall receive a reduction in their interest
rate of up to but not greater than 1%.
PLAN C: Under Borrower Incentive Plan C, after making the first 48 monthly
payments on time, Borrowers shall receive a reduction in their interest
rate of up to but not greater than 1%.
Under any Incentive Plan, Borrowers must make and maintain on-time
scheduled payments to continue to qualify for the rate reduction.
"On-time" scheduled payment is considered to be one that is made prior to
the 15th day of delinquency.
Regardless of Incentive Plan, CFS may, but is not required to offer
Borrowers up to 0.25% (one quarter of one percent) rate reduction upon the
commencement of electronic drafting for Consolidation Loan payment
purposes. Said 0.25% rate reduction, if offered, shall only apply so long
as the Borrower maintains electronic drafting for making scheduled
payments and is in active repayment on their Loan.
CFS may offer one or more of the above Borrower Incentive Plans (Plan A,
Plan B or Plan C) at any time during the term of this Agreement.
CFS shall have sole and exclusive responsibility and liability for
accurately communicating to each Borrower the Incentive Plan terms that
apply to the Borrower's Loan. CFS shall clearly and conspicuously xxxx the
electronic and/or paper records supporting each Loan to identify the
Incentive Plan terms that apply to such loan and ensure communication of
the same to the designated Servicer. If the Lender sells or securitizes
any Loan, Lender shall ensure that the Borrower benefits on each Loan are
continued by any Purchaser or subsequent Purchaser of such Loan. Lender
indemnifies and agrees to hold CFS harmless from any and all loss, damage,
or liability that results or may result from the Lender's noncompliance
with the requirements of this paragraph.
The Lender, CFS, or Servicer may reinstate disqualified Borrowers that
lose their benefits due to Servicer error. The Servicer shall communicate
to the Borrowers when they have achieved the rate reduction, at
disqualification and at reinstatement, as applicable.
13. Fees:
For the first 270 days after this Agreement is effective or funding by the
Lender of [****], whichever comes first, a fee of [****] for each
Successfully Completed Application shall be paid. Thereafter the fees
stated below shall apply.
CFS shall receive a fee of [****] for every Successfully Completed
Application under Plan A.
CFS shall receive a fee of [****] for every Successfully Completed
Application under Plan B.
CFS shall receive a fee of [****] for every Successfully Completed
Application under Plan C.
14. Marketing:
i. Marketing the RWCL Program is the responsibility of CFS, subject to
the following conditions. The Lender and Servicer will not produce
any of the marketing materials developed, nor will their names be
used in any promotions without their prior written consent.
ii. Lender agrees that CFS can cross market mutually agreed upon
products and services to Borrowers during the term of this Agreement
and up to sixty (60) months after this Agreement is terminated. In
performing these cross marketing services as a service provider for
Lender, CFS shall at all times comply with (i) Title V of the
Xxxxxx-Xxxxx-Xxxxxx Act, the implementing regulations thereof, and
all other applicable federal and state consumer privacy laws and
regulations, and (ii) Direct Marketing Association guidelines and
all State "do not solicit" telemarketing lists (whether covering
telemarketing or direct mail marketing). Furthermore, CFS shall not
attempt further phone calls or send additional mailings to, or in
any way contact, individuals who request that no future phone calls,
mailings, or contracts be made to the individual.
15. Regulatory Changes:
If regulatory or legislative changes occur to the FFELP consolidation
program which renders the Lender and/or CFS unable to continue the RWCL
Program in compliance with the law, or materially impacts the Lender's or
CFS' profit margin, the Lender and CFS shall make a good faith effort to
restructure the Agreement to bring Lender and CFS into compliance with the
law within the RWCL, or renegotiate the pricing structure. If Lender and
CFS are unable to mutually agree to a restructured Agreement that allows
them both to continue in compliance with the law at a reasonable profit
margin, Lender and/or CFS shall have the option to withdraw from the RWCL
Program with 180 days prior written notice to the other. If legislative or
regulatory changes prohibit, limit or alter the compensation provisions
for the service rendered by CFS to Lender, either party shall have the
option to negotiate an amendment to the Agreement or withdraw from the
RWCL Program with 180 days prior notice to the other party.
16. Invoicing:
CFS shall invoice each Friday for all Successfully Completed Applications
transmitted to Servicer(s) during that week. Lender agrees to execute a
wire transfer of funds for all invoices within three Business Days of
receipt of invoice.
17. Expenses:
Other than the expenses described in this Agreement, all parties agree to
be responsible for their respective expenses under the RWCL Program. CFS
shall be responsible for the cost of all marketing materials, data entry,
sales and related expenses incurred with respect to its marketing
activities.
18. Confidentiality:
This Agreement is considered confidential by all parties hereto and must
not be copied or disclosed to anyone other than employees of the parties
directly involved in the RWCL Program or such accountants, attorneys, or
other professional advisors or government agencies having jurisdiction
over such parties without the written consent of the other parties, except
as otherwise required by law.
19. Representations, Warranties, and Covenants of CFS:
CFS represents and warrants each of the following to the Lender on
the date of this Agreement, on the date of each request for Lender
to originate and fund any Loan and on the date of Lender's funding
of any Loan:
A. CFS (i) is duly organized, validly existing, and in good standing
under the laws of the jurisdiction in which it is organized; (ii) is
duly qualified to transact business and is in good standing as a
foreign limited liability company in each jurisdiction where the
nature and extent of its business and properties require due
qualification and good standing; (iii) possesses all requisite
authority, permits and power to conduct its business as is now
being, or is contemplated by this Agreement to be, conducted; and
(iv) is in compliance with all applicable laws.
B. The execution and delivery by CFS of this Agreement and the
performance by it of its obligations hereunder (i) are within its
limited liability company power; (ii) have been duly authorized by
all necessary company action; (iii) except for any action or filing
that has been taken or made on or before the date of this Agreement,
requires no action by or filing that has been taken or made on or
before the date of this Agreement, require no action by or filing
with any governmental agency; and (iv) do not violate any provision
of its operating or company agreement.
C. This Agreement will, upon execution and delivery by all parties
thereto, constitute a legal and binding obligation of CFS,
enforceable against CFS according to its terms.
D. CFS is not subject to, or aware of the threat of, any litigation
that is reasonably likely to be determined adversely to it and that,
if so adversely determined, would have a material adverse effect on
its financial condition and no outstanding or unpaid judgments
against CFS exist.
E. Each Loan CFS requests to be originated and funded by Lender (i) is
genuine in all respects and what it purports to be; (ii) is free
from any material claim for credit, deduction, or allowance of any
such obligor and free form any defense, dispute, setoff,
counterclaim (other than for payments made in respect of it); (iii)
was originated and is in compliance in all material respects with
all laws and rules and regulations; and (iv) conforms to the
applicable requirements for Guarantee.
CFS further represents and warrants to the Lender the following: until all
Loans that Lender funds hereunder have been repaid in full or paid as a
claim by a Guarantor, CFS or transferred by the Lender to another entity:
F. CFS shall maintain books, records and accounts necessary to prepare
financial statements according to GAAP.
G. Upon two (2) Business Days prior written notice, CFS shall allow
Lender (including Lender's regulators and auditors) to inspect any
of its properties, to review reports, files and other records and to
make and take away copies, to conduct tests or investigations and to
discuss any of its affairs, conditions and finances with its
directors, officers, employees or representatives from time-to-time
during reasonable business hours. However, this section is strictly
limited to those files, records, reports, affairs, conditions, and
finances relating to Loans owned by Lender.
H. CFS shall (i) maintain good standing in its state of organization,
and (ii) maintain all licenses, permits, and franchises necessary
for its business.
20. Representations and Warranties of Lender:
Lender represents and warrants to CFS on the date of this Agreement, on
the date of each request for Lender to originate and fund any Loan, and on
the date of Lender's funding of any Loan:
A. Lender (i) is duly incorporated, validly existing, and in good
standing under the laws of the jurisdiction in which it is
organized; (ii) is duly qualified to transact business and is in
good standing as a foreign company in each jurisdiction where the
nature and extent of its business and properties require due
qualification and good standing; and (iii) possesses all requisite
authority, permits and power to conduct its business as is now
being, or is contemplated by this Agreement to be, conducted and(iv)
is in compliance with all applicable laws.
B. The execution and delivery by Lender of this Agreement and the
performance by it of its obligations hereunder (i) are within its
corporate power; (ii) have been duly authorized by all necessary
action; (iii) except for any action or filing that
has been taken or made on or before the date of this Agreement,
require no action by or filing with any governmental agency; and
(iv) do not violate any provision of its articles of incorporation.
C. This Agreement will, upon execution and delivery by all parties
thereto, constitute a legal and binding obligation of Lender,
enforceable against Lender according to its terms.
D. Lender is not subject to, or aware of the threat of, any litigation
that is reasonably likely to be determined adversely to it and that,
if so adversely determined, would have a material adverse affect on
its financial condition.
21. Notice:
All notices given under this Agreement shall be in writing and shall be
sent by certified mail, return receipt requested or by Courier Service
that can validate receipt of such notice to the parties, at their
respective addresses given below. Such notice shall not be effective until
received by the respective party.
IF TO CFS:
Mr. J. Xxxxx Xxxxxx, CEO
Collegiate Funding Services, L.L.C.
000 Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxxxxxx, Xxxxxxxx 00000
IF TO LENDER:
The Brazos Higher Education Service Corporation, Inc.
Attn: Xxxxxx Xxxxxx, Xx.
0000 Xxxxxxxxxx Xxxxxx
Xxxx, XX 00000
X.X. Xxx 0000
Xxxx, XX 00000-0000
Fax# (000) 000-0000
22. Entire Agreement:
This Agreement represents the entire agreement of the parties. Each of the
parties has read and understands this Agreement, and has had the
opportunity to have this Agreement reviewed by an attorney.
23. Term:
The parties agree that the term of the Agreement shall be from the date
first written above until the close of business on December 31, 2003 (the
"Initial Term of this Agreement") and shall automatically renew for an
additional one year terms unless one of the parties
notifies the other respective party in writing of its intent not to renew
at least 90 days prior to the end of the Initial Term or 180 days for any
renewal term.
Either party may terminate this agreement upon 60 days notice upon the
following:
A. Any representation or warranty made by either party (or any of its
officers) under or in connection with this Agreement shall prove to
have been incorrect in any material respect when made; or
B. Either party shall fail to perform or observe any term, covenant or
agreement contained in this Agreement on its part to be performed or
observed, and such failure shall remain uncured for 60 days after
notice of such failure is received from the other party; or
C. Either party shall generally not pay its debts as such debts become
due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against
Borrower seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, organization, arrangement,
adjustment, protection, relief, or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors, or seeking the entry or an order for relief or
the appointment of a receiver, trustee, custodian or other similar
official for it or for any substantial part of its property and, in
the case of any such proceeding instituted against it (but not
instituted by it), either (i) such proceeding shall remain
undismissed or unstayed for a period of 30 days, or (ii) any of the
actions sought in such proceeding (including, without limitation,
the entry of an order for relief against, or the appointment of a
receiver, trustee, custodian or other similar official for, it or
for any substantial part of its property) shall occur; or Borrower
shall take any corporate action to authorize any of the actions set
forth above in this subsection (d); or
D. Any judgment or order for the payment of money in excess of $500,000
which is not covered by applicable insurance shall be rendered
against either party and either (i) enforcement proceedings shall
have been commenced by any creditor upon such judgment or order (ii)
there shall be any period of 10 consecutive days during which a stay
of enforcement of such judgment or order, by reason of pending
appeal or otherwise, shall not be in effect; or
E. Either party incurs or suffers a material adverse change in its
financial condition which, in the discretion of the other party,
adversely affects its ability to perform any of its obligations
under the Agreement.
24. Ownership Change
This contract is assignable by either party upon written consent of the
other party, which consent shall not be unreasonably withheld.
25. Amendment:
This Agreement may be amended only by a written instrument signed by all
of the parties hereto. The effective date of any amendments shall be the
date the parties have signed said instrument unless otherwise stated
therein.
26. Binding Effect:
This Agreement shall be binding upon and shall inure to the benefit of the
parties and each one's permitted successors and assigns. No party may
assign its rights or delegate its duties under this Agreement without the
other parties' prior written consent (which shall not be unreasonably
withheld.). Any assignment contrary to the foregoing shall be void.
27. Agency:
The parties acknowledge that nothing herein is intended to authorize CFS
or the Lender to enter into an agency relationship with any other entity
or individual, including without limitation the holder of any loans to be
consolidated or their agents, nor shall any provision hereof be
interpreted as creating such an agency relationship or subjecting either
the Lender or CFS to any liability, loss or imputed or vicarious
knowledge, liability, or loss in connection with any Loan made pursuant to
this Agreement by reason of any act or omission of any such other entity
or individual.
28. Default; Jurisdiction:
Should any party default hereunder, the nondefaulting party shall be
entitled to recover all costs of enforcing this Agreement, including
reasonable attorney's fees. This agreement shall be governed by, subject
to, and interpreted in accordance with the laws of the Commonwealth of
Virginia without regard for its conflict of laws statute.
29. Indemnification.
Each party (the "Indemnifying Party") agrees to assume liability and to
pay for, and hereby agrees to indemnify, defend, and hold harmless the
other party (the "Indemnified Party") and its officers, directors,
employees, Affiliates, successors, and assigns from and against any and
all liabilities, losses, costs, damages, penalties, fines, or expenses,
including without limitation legal costs and reasonable attorney's fees
(together "Losses"), in connection with any claims, suits or proceedings
made or brought by a third party to the extent that such Losses result
from, arise out of, or relate to a violation, breach or non-performance by
the Indemnifying party or its agent(s) of any of the Indemnifying Party's
obligations, covenants, representations, warranties, or certifications
under or in connection with this Agreement. It is specifically understood
that neither party shall make or agree to any settlement of any such claim
involving financial compensation by the other party, its successors,
assigns, or Affiliates. Except in the event of fraud or criminal
misconduct, neither party shall be responsible or liable to the other
party for consequential, incidental, indirect, special or punitive
damages.
30. Severability.
It is the intent of the parties that the Agreement be construed and
interpreted in a manner such as to permit enforcement of all of its terms.
However, if any provision of this Agreement is held invalid or
unenforceable in any jurisdiction for any reason, such provision shall, as
to such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without invalidating the remainder of such provision or
the remaining provisions hereof, and any such invalidity or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction, unless such
invalidity shall destroy the economic incentive for either party's
participation in the Agreement. Such invalid or unenforceable provision
shall be amended, if possible, in accordance with Section 25 hereof in
order to accomplish the purposes of this Agreement.
31. Mandatory Arbitration.
Any dispute or controversy between the parties involving less that
$250,000 arising out of, connected with or relating to this Agreement
shall be resolved by binding arbitration administered and conducted under
the Commercial Arbitration Rules of the American Arbitration Association
and title 9 of the United States Code. The prevailing party in any
judicial action or arbitration shall be entitled to reimbursement from the
other party for cost, filing fees, arbitration filing fees, reasonable
pretrial, trial and appellate attorneys' fees, witness fees, expert fees,
arbitration panel fees, and travel fees. A judgment upon the arbitration
award may be entered in any court having jurisdiction. Any arbitration
hearing shall take place in the Commonwealth of Virginia. Nothing in this
section, however, shall prevent either party from seeking equitable relief
from a court of competent jurisdiction for the other party's breach of
Sections 12, 19 and 20 hereof or infringement of intellectual property
rights and proprietary sections of this Agreement.
32. No Implied Waivers.
No failure or delay on the part of any party in exercising any right,
privilege, power, or remedy under this Agreement, and no course of
dealings among the parties, shall operate as a waiver of such right,
privilege, power, or remedy; nor shall any single or partial exercise of
any right, privilege, power, or remedy under this Agreement preclude any
other or further exercise of any right, privilege, power, or remedy or the
existence of any other right, privilege, power, or remedy. No waiver shall
be effective against any party unless signed in writing by an authorized
officer of such party.
33. Corporate Obligation.
No director, officer, employee or agent of any party shall be individually
liable to any other party for the taking of any action, or for refraining
to take any action, in good faith pursuant to this Agreement. The
Agreement is a corporate obligation and any liability arising hereunder
shall be a corporate liability.
34. Remedies Not Exclusive.
No remedy by the terms of this Agreement conferred upon or reserved to any
party hereto is intended to be exclusive of any other remedy, but each and
every such remedy shall be cumulative and in addition to every other
remedy given under this Agreement or existing at law or in equity
(including, without limitation the right to such equitable relief by way
of injunction) or by statute on or after the date of this Agreement.
Entered into as of this 3rd day of December, 2002.
THE BRAZOS HIGHER EDUCATION SERVICE CORPORATION, INC.
By /s/ Xxxxxx Xxxxxx, Xx.
-----------------------------
Xxxxxx Xxxxxx, Xx., President
COLLEGIATE FUNDING SERVICES, LLC
By /s/ J. Xxxxx Xxxxxx
------------------------------
J. Xxxxx Xxxxxx, Chief Executive Officer
CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT. THE SYMBOL "[****]" HAS BEEN INSERTED IN PLACE OF THE PORTIONS SO
OMITTED.
Xxxxxx Xxxxxx BR2001
From: Xxxx Xxxxxxxx [xxxx.xxxxxxxx@xxxxx.xxx]
Sent: Thursday, September 04, 2003 12:06 PM
To: xxxxxx.xxxxxx@xxxxx.xxx
Subject: FW: Brazos Email Agreement
Importance: High
Message
-----Original Message-----
From: Xxxx Xxxxxxxx [mailto:xxxx.xxxxxxxx@xxxxx.xxx]
Sent: Wednesday, September 03, 2003 4:53 PM
To: xxxxxx.xxxxxx@xxxxx.xxx
Subject: FW: Brazos Email Agreement
Importance: High
-----Original Message-----
From: Xxxxxx Xxxxxxx [mailto:xxxxxxxx@xxxxxxxx.xxx]
Sent: Wednesday, September 03, 2003 4:50 PM
To: xXxxx.Xxxxxxxx@xxxxx.xxx'
Subject: FW: Brazos Email Agreement
-----Original Message-----
From: Xxxxxx Xxxxxxx
Sent: Wednesday, September 03, 2003 12:18 PM
To: Xxxxx XxXxxx
Subject: FW: Brazos Email Agreement
This will confirm our agreement under the Consolidation Loan Origination
Responsibility Agreement dated as of December 3, 2002 between Collegiate Funding
Services, LLC ("CFS") and The Brazos Higher Education Service Corporation, Inc.
("Lender") that the Lender agrees to fund at least [****] in Successfully
Completed Applications ("SCA") during the month of September 2003 at a marketing
fee of [****] per SCA. Payment for all SCA sent to Lender under the Agreement as
modified by this email agreement received by Lender by 3 PM on September 26,
2003 shall be made by wire transfer to CFS's designated account no later than 3
PM on September 29, 2003.
Except as modified by the terms contained in this email, the terms and
conditions of the Agreement shall remain in full force and effect. Please
confirm your agreement to these terms by signing and dating a copy of this email
and faxing it to me at 000-000-0000. I will fax a signed copy to you. We will
then send you (and ask that you do the same) a signed copy for your records.
Collegiate Funding Services, LLC
The Brazos Higher Education Service Corporation, Inc.
Name: Xxxxx XxXxxx Accepted 9-4-03
Executive Vice President /s/ Xxxxxx Xxxxxx, Xx.
CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT. THE SYMBOL "[****]" HAS BEEN INSERTED IN PLACE OF THE PORTIONS SO
OMITTED.
BR2001
From: Xxxxx XxXxxx [xxxxxxx@xxxxxxxx.xxx]
Sent: Friday, September 26, 2003 2:37 PM
To: 'xxxx.xxxxxxxx@xxxxx.xxx'
Cc: Xxxxxx Xxxxxxx
Subject: CFS
Xxxx,
Per our discussion today.
This will confirm our agreement under the Consolidated Loan Origination
Responsibility Agreement dated as of December 3, 2002 between Collegiate Funding
Services, LLC ("CFS") and The Brazos Higher Education Services Corporation, Inc.
("Lender") that the Lender agrees to fund at least [****] in Successfully
Completed Applications ("SCA") between October 1, 2003 and December 31, 2003 at
a marketing fee of [****] per SCA. In the alternative, a marketing fee of [****]
will paid for SCA's that only include a .25% ACH reduction. Weekly invoicing and
payment for SCA's sent by CFS that are funded by the Lender will be as follows:
Invoice Date Payment Date
October 3 October 8
October 10 October 15
October 17 October 22
October 24 October 29
October 31 November 5
November 7 November 12
November 14 November 19
November 21 November 26
November 28 December 3
December 5 December 10
December 12 December 17
December 19 December 24
December 26 December 29
Payment by Brazos shall be by wire transfer to a CFS designated account by 3:00
p.m. EST on each scheduled Payment Date.
This email agreement supercedes any and all prior emails, correspondence or
agreements between the parties and except as modified by the terms contained in
this email, the terms and conditions of the Agreement shall remain in full force
and effect. Both parties agree that this email agreement may be executed in
counterparts and that the other respective party can rely upon the faxed
signature of the other respective party. Please confirm your agreement to these
terms by signing and dating a copy of this email and faxing it to me at
000-000-0000 by close of business Tuesday September 30, 2003. I will fax a
signed copy to you. We will then send you (and ask that you do the same) a
signed paper copy for your records.
Agreed
/s/ Xxxxxx Xxxxxx, Xx.
------------------------------------
Brazos Higher Education Services
Corp
Agreed
/s/ W. Xxxxx XxXxxx
------------------------------------
Collegiate Funding Services, LLC
W. Xxxxx XxXxxx
CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT. THE SYMBOL "[****]" HAS BEEN INSERTED IN PLACE OF THE PORTIONS SO
OMITTED.
FIRST AMENDMENT TO THE CONSOLIDATION LOAN ORIGINATION RESPONSIBILITY AGREEMENT
DATED AS OF DECEMBER 3, 2002
THIS FIRST AMENDMENT (the "Amendment"), is entered into as of January 1,
2004, by and between Brazos Higher Education Service Corporation, Inc., with its
principal office located in Waco, Texas, acting on behalf of one of more
affiliates in conjunction with an eligible lender trustee, (the "Lender"), and
Collegiate Funding Services, L.L.C., with its principal offices located in
Fredericksburg, Virginia ("CFS").
WHEREAS, the Lender and CFS are parties to a certain Consolidation Loan
Origination Responsibility Agreement dated as of December 3, 2002, (the
"Agreement") which provides for marketing, servicing, and funding of
Consolidation Loans made pursuant to the provisions of the Federal Family
Education Loan Program (FFELP) through CFS's program generally known as the Real
World Consolidation Loan Program (RWCL Program); and
WHEREAS, the parties desire to amend the following section(s) of the
agreement for the time period between January 1, 2004, and December 31, 2004.
All other sections, not specifically referenced herein, remain in full force and
effect. On January 1, 2005, this Amendment shall expire and the terms of the
Agreement, as written prior to the execution of the Amendment, shall be in full
force and effect.
NOW THEREFORE, in consideration of the of the mutual covenants and
agreements contained herein, and for other goods and valuable consideration, the
receipt and sufficiency of which is acknowledged by each party, the parties
agree as follow,
1. Paragraph 9 is amended by deleting the term "[****]" in the second
and third sentences and inserting the term "[****]" in each place.
2. Paragraph 11 is amended by adding the following to the end:
"For the first renewal period between January 1, 2004 and December 31, 2004, CFS
agrees to provide to Lender and Lender agrees to fund at least [****] in
eligible Loans. CFS may also make an additional [****] in eligible Loans
available to Lender for funding during this period."
3. Paragraph 13 is amended by adding the following to the end:
"For the period between January 1, 2004 and December 31, 2004, CFS shall receive
a fee of [****] for every Successfully Completed Application."
(Rest of page intentionally left blank, signature page to follow)
IN WITNESS WHEREOF, the parties have hereunto written their hands by duly
authorized officers as of the day and year written above.
COLLEGIATE FUNDING SERVICES, LLC BRAZOS HIGHER EDUCATION
SERVICE CORPORATION, INC.
("CFS") ("Lender")
/s/ W. Xxxxx XxXxxx /s/ Xxxxxx Xxxxxx, Xx.
-------------------------------- ----------------------------
By: W. Xxxxx XxXxxx By: Xxxxxx Xxxxxx, Xx.
