Exhibit 10.7
SLND LENDER PARTICIPATION AGREEMENT FOR INSURANCE
GUARANTEED STUDENT LOANS AND PLUS LOANS
STUDENT LOANS OF NORTH DAKOTA - GUARANTOR
SFN 50647-006 (11-95)
The parties to this agreement are First Bank National Association (the lender)
and the State of North Dakota doing business as Bank of North Dakota acting as
the Student Loans of North Dakota-Guarantor (SLND-Guarantor).
In consideration of the mutual promises contained herein, SLND-Guarantor hereby
agrees and covenants to reimburse the Lender in accordance with the Higher
Education Act of 1965, as amended, and the regulations issued thereunder (the
"Act" and "Regulations" respectively) on any Guaranteed Student Loan or PLUS
loan held by the Lender and insured pursuant to the terms of this agreement. The
Lender hereby agrees and covenants to pay a premium as designated herein, that
it is an "eligible lender" within the usage of that term under the Act and the
Regulations, and to abide by and comply with the terms and conditions of this
agreement.
TERMS AND CONDITIONS INCORPORATION OF LAW: This agreement is subject to, and
hereby incorporates by reference as a part of this Agreement, the current
provisions of, and subsequent amendments to the Act and the Regulations, the
North Dakota Century Code Chapter 15-62.1 and SLND-Guarantor rules, regulations
and procedures, including but not limited to items such as time, amount, rate,
place, or manner of performance. The terms and conditions set forth in this
agreement shall be subject to automatic modification and revision from time to
time by the process of amendment and revision of the above cited material.
Nothing in this agreement is intended to abrogate, modify, or limit the
applicability of any of the above cited material.
FORMS: All forms necessary to the performance of obligations imposed by this
agreement shall be provided by SLND-Guarantor. Any addition, substitution, or
alteration of these forms provided by SLND-Guarantor shall be grounds for
avoidance by SLND-Guarantor of any insurance obligation that would otherwise be
imposed by this agreement.
DUE DILIGENCE: The Lender shall exercise due care and diligence in making,
servicing, and collection of loans guaranteed pursuant to this agreement. In the
servicing and collection of loans guaranteed under this agreement, due care and
diligence requires the utilization of practices that are at least as extensive
and forceful as those utilized by financial institutions in the servicing and
collection of other consumer loans.
This does not, however, preclude the proof of existence or failure of due
diligence by any other standards. Failure of due diligence with regard to any
loan guaranteed hereunder, will, without precluding other remedies, constitute
grounds of avoidance by SLND-Guarantor of its guaranty obligation on that loan.
RECORDS: The Lender shall compile and maintain complete, accurate, and current
records of all documentation, communications (with the Student and SLND-
Guarantor) correspondence, and account data which pertains to each student
applying for and/or receiving a student loan guaranteed pursuant to this
agreement. Such records required to be maintained will be specifically
designated by SLND-Guarantor. These records shall be retained by the Lender in
any reasonably accessible form for a period of at least five (5) years after the
loan is either repaid in full or a claim by the Lender has been paid in full by
SLND-Guarantor.
INSPECTION: The Lender shall, upon reasonable request, make available to SLND-
Guarantor, the Department of Education or their duly designated representative
any and all books, records, documentation (including, but not limited to,
memoranda, correspondence and computer print-outs) necessary to assure and
evidence compliance with this agreement and any applicable law. Such books,
records, and documentation shall be available during regular office hours of any
working day, no later than five (5) working days after the request for
inspection. The material may be made available in whatever form retained
(microfilm, computer data, or print), but whenever possible, the original
document should be provided.
In the event that SLND-Guarantor or the Secretary of Education shall have
reasonable cause to believe that there exists a potential, substantial
impairment of the interests of the State of North Dakota, SLND-Guarantor, the
United States Government, or any eligible student, then SLND-Guarantor, acting
through its Director, and the Secretary of Education reserve the right upon
demand, of immediate inspection of such books, records, documentation, or other
material as may pertain or be relevant to the accuracy and completeness of the
Lender's records and reports, and compliance by the Lender with these terms and
conditions.
TERMINATION: This agreement may he terminated by either party upon not less than
ninety (90) days written notice, although such termination by SLND-Guarantor
shall be for cause, and shall not become final until the Lender is afforded
adequate notice and an opportunity for a hearing on the merits of SLND-
Guarantor's claims and contentions. However, SLND-Guarantor shall have the power
to suspend operation of this agreement, pending the outcome of said hearing, if
SLND-Guarantor determines that such action is necessary to prevent substantial
harm to the interests of the State of North Dakota, SLND-Guarantor, the United
States Government, or any eligible student. Termination by either party shall
not affect the obligations incurred under this agreement including loans
guaranteed prior to the effective date of the termination. In the event that
SLND-Guarantor shall have probable cause to believe that any of the assurances
or representations made by the Lender are incomplete, inaccurate, or misleading
and deceptive, or that there has been a failure by the Lender to comply with the
terms and conditions of this agreement, in any material respect, then short of
termination or suspension, the Director of SLND-Guarantor shall have the right
to take any reasonable action necessary, including, but not limited to
litigation, withholding of payments, probation, or limitation of eligibility, or
requiring reimbursement of any funds expended or obligated to be expended by
SLND-Guarantor as the result of reliance upon such assurances or representations
or anticipation of compliance.
ASSIGNMENT: This agreement may not be transferred, assigned, or delegated either
as to rights or responsibilities accruing thereunder to any other party. The
terms and conditions of this agreement shall be binding upon the heirs and
successors in interest of the respective parties as though original parties to
this agreement.
WARRANTY: The lender hereby warrants and covenants that all assurances and
representation, except those on which the Lender is given a right to rely in
good faith, made by the Lender regarding any transactions pursuant to this
agreement are complete and accurate statements of fact. Any representations made
by the Lender, unless amended, shall be binding upon and against the Lender for
the duration of the period of insurance coverage provided for herein.
DESIGNATED REPRESENTATIVE: Unless otherwise designated at any time over the
duration of this agreement, the person(s) signing this agreement on behalf of
each party shall be deemed to be the proper person(s) to whom notices and any
other communications shall he directed.
SUBROGATION: Upon filing of a default claim, and as a condition precedent to
reimbursement under the terms of this Agreement, the Lender shall assign to
SLND-Guarantor all rights and responsibilities of the Lender pursuant to that
note and to this Agreement as it pertains to that note.
CONDITION PRECEDENT: Compliance by the lender with the terms and conditions of
this agreement, as they are to be complied with from time to time hereunder,
shall be deemed a condition precedent to the insurance obligation imposed upon
SLND-Guarantor hereunder.
REMEDIES: Unless otherwise provided, any noncompliance with the terms and
conditions of this agreement shall subject the noncomplying party to any and all
forms of remedial action, legal and equitable under the applicable laws of the
State of North Dakota. No choice of remedies shall be required of the injured
party.
MODIFICATION: Unless otherwise provided herein, any modification of the terms
and conditions of this agreement shall not be effective unless evidenced by a
writing signed by both parties.
SEVERABILITY: Should any provision of this agreement be found to be inapplicable
or otherwise not binding on the parties, it is the intention of the parties that
the remainder of the agreement shall remain in full force and effect upon the
respective rights and obligations of the parties hereto.
agreement shall remain in full force and effect upon the respective rights and
obligations of the parties hereto.
This Agreement shall be effective from the date appearing below as the date of
execution and acceptance by the authorized officer of the SLND-Guarantor.
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Eligible Lender Name and Address (Typed)
First Bank National Association
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By (Authorized Officer of the Eligible Lender) Date
/s/ Xxxx Xxxxxxxx 7/3/97
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Name and Title of Authorized Officer (Typed)
Xxxx Xxxxxxxx, Senior Vice President
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Address of Eligible Lender (Typed)
000 Xxxxxx Xxxxxx Xxxxx, Xxxxxxxxxxx, XX 00000
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Lender OE Number
833405
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Eligible Lender's Designated Representative if Other Than the Authorized Officer
Named Above (Typed)
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Student Loans of North Dakota Director Date
/s/ Xxxxx Xxxxxxxx 070897
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White Copy - Guarantor Yellow Copy - Lending Institution
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