Exhibit 10.15
AGREEMENT TO GUARANTEE LOANS
This agreement entered into between the Student Loan Guarantee Foundation of
Arkansas, Inc. (hereinafter referred to as "SLGFA") and Student Loan Finance
corporation and Subsidiaries (US Bank, Trustee) (hereinafter referred to as
"Lender");
WITNESSETH:
WHEREAS, SLGFA is a nonprofit corporation whose objectives are to provide
opportunities for a higher education for all eligible borrowers who, though
wanting such education and being qualified for it, are deterred by financial
considerations; and
WHEREAS, SLGFA maintains a central office for the guarantee of loans made by
participating lenders to students attending eligible educational institutions;
and
WHEREAS, Lender is desirous of participating in the Student Loan Programs
administered by the SLGFA subject to the terms and conditions hereinafter set
forth; and
THEREFORE, in consideration of the loan(s) that Lender makes or acquires
hereunder, and in further consideration of the mutual covenants hereinafter
expressed, SLGFA and Lender agree as follows:
DEFINITIONS:
As used herein the following words shall have the meanings,
ACT: The Higher Education Act of 1965 (20 U.S.C. Section 1071 et seq.), as
amended and in effect from time to time, or any successor enactment thereto, any
applicable regulations duly promulgated thereunder.
APPROVED NOTE: A promissory note approved by the U.S. Department of Education
for use in the Student Loan Programs of the SLGFA.
BORROWER: A person who is the maker of an Approved Note.
DEFAULT: With respect to any Approved Note, the occurrence of any event which
constitutes a default under the terms of the note or the Act.
LOAN APPLICATION: A document or information transmitted to the SLGFA by
electronic means approved by SLGFA by which a borrower applies for a loan.
POLICY AND PROCEDURES MANUAL: A handbook of SLGFA describing the administration
of the Arkansas Guaranteed Student Loan Program, including any policy memoranda
consistent with the Act, which shall be provided by the SLGFA as addenda to the
Policy and Procedures Manual.
NOTICE OF DEFAULT: A document approved by the SLGFA and/or the U.S. Department
of Education, and designed to put the SLGFA on notice that an approved loan is
in default.
STUDENT: A citizen of the United States or eligible noncitizen accepted for
enrollment or enrolled at a participating educational institution who is
otherwise eligible under the Act.
1. Lender agrees that, in respect to all loans made or acquired by it under a
loan program of SLGFA and all Approved Notes made or acquired by it from time to
time, it will:
a. exercise reasonable care and diligence in the making, servicing and
collection thereof from the Borrower consistent with the Act and the Policy
and Procedures Manual, and if the Borrower fails to honor his or her
obligation, Lender will pursue collection efforts consistent with the Act
and the Policy and Procedures Manual prior to submitting a default claim;
b. comply with all procedures and conditions on its part to be performed as
set forth in this Agreement and the Policy and Procedures Manual. It is
expressly understood that failure to comply with the Act or the Policy and
Procedures Manual may relieve the SLGFA of its guarantee. In the event of
any conflict between the Act and the Policy and Procedures Manual, the Act
shall govern;
c. comply with all applicable Federal and State laws; and
d. provide promptly such information and reports as may from time to time to
be reasonably requested by SLGFA.
2. The SLGFA will guarantee each Approved Note evidencing a loan made to a
Borrower by Lender pursuant to the loan program of SLGFA; provided that a
guarantee fee is paid within a reasonable time; provided however, that SLGFA
shall not be obligated to guarantee any such Approved Note if the procedures and
requirements of applicable law and regulations, this Agreement, and the Policy
and Procedures Manual have not been complied with in respect to such Approved
Note.
3. In the event of a delinquency or a Default with respect to any Approved
Note, Lender shall follow the procedure set forth in the Act and the Policy and
Procedures Manual. SLGFA does not guarantee payment by the Borrower of any
delinquency charges imposed for late payments, and will not accept a default
claim based solely on non-payment of such charges. Upon receipt from Lender of a
notice of default together with the Approved Note (assigned to SLGFA), the Loan
Application, and evidence of due diligence and collection efforts consistent
with the Act and Policy and Procedures Manual, SLGFA will pay to Lender one
hundred percent (100%) of the amount of the unpaid balance and interest due on
such Approved Note on which the proceeds were disbursed prior to October 1,
1993, and ninety-eight percent (98%) of the amount of unpaid balance and
interest on such Approved Note on which the proceeds were disbursed after
October 1, 1993; or such other amount which is mandated by the Act (other than
any portion of such interest payable by the U.S. Department of Education under
the Act); provided Lender has complied in all material respects with the
procedures and requirements of applicable law and regulations, this Agreement
and the Policy and Procedures Manual in respect of such Note(s). SLGFA shall
thereupon succeed to all rights of Lender under such Approved Note.
4. The liability of SLGFA as guarantor of any Approved Note in accordance
herein shall not be affected by the fact that the Borrower was a minor at the
time of execution of the Approved
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Note. Upon death or permanent and total disability of the Borrower, SLGFA will
pay Lender the full amount of the unpaid balance and interest due on such
Approved Note (other than any portion of such interest payable by the U.S.
Department of Education under the Act); provided Lender has complied in all
material respects with the procedures and requirements of applicable law and
regulations, this Agreement and Policy and Procedures Manual in respect to such
Approved Note. The SLGFA will also pay Lender in circumstances other than those
which are described in this paragraph if required to do so under the Act. Such
circumstances may include, but are not limited to the closing of a school which
prevented the Borrower from completing a program of instruction, or the false
certification of the school; in each situation as defined in the Act. Upon the
filing of a proceeding in bankruptcy which is applicable to any Approved Note
guaranteed by the SLGFA, Lender must determine the nature of the bankruptcy
claim by the Borrower and follow the policies and procedures established by the
Act and the Policy and Procedures Manual for payment of a bankruptcy claim on
such Approved Note.
5. No change shall be made in the terms of any Approved Note, except with the
prior written consent of SLGFA. Any change made without SLGFA's consent, shall
have the effect, at the option of SLGFA, of voiding SLGFA's guarantee of such
Approved Note.
6. If either party shall violate or fail to comply with any applicable law or
government regulation in respect of any Approved Note, then such party hereby
agrees to assume liability for, and does hereby indemnify, protect and keep
harmless the other party, its successors, assigns, directors, officers, agents
and servants from and against any and all liabilities, losses, damages,
penalties, claims, actions, expenses and disbursements, (excluding legal fees
and expenses), imposed on, incurred by or asserted against them or any of them,
in any way related to arising out of such violation or failure to comply,
regardless of whether SLGFA shall have purchased such Approved Note from Lender.
7. SLGFA shall be discharged from its obligations on an Approved Note under
this agreement if Lender materially breaches its obligations under said
agreement with respect to such Approved Note. This discharge shall be effective,
regardless of whether such material breach is discovered by SLGFA before or
after SLGFA's payment of a claim, or its rendering other performance hereunder
in regard to the Approved Note.
8. Lender must at all times maintain its SLGFA loan program records on a
current basis and in satisfactory form in accordance with the Policy and
Procedures Manual and as required by the Act, and shall afford access thereto at
any reasonable time to SLGFA or its agents and to the U.S. Department of
Education or other agencies of the federal government designated to assure the
correctness and verification of such records.
9. No recourse under or upon this Agreement or any Approved Note or guarantee
thereof, or for any claim based thereon or otherwise in respect thereof, shall
be had against any board member, director, or employee, as said, past, present,
or future, of SLGFA or of any successor agency; it being understood that this
Agreement and the guarantees of Approved Notes are solely SLGFA obligations and
that no personal liability whatever shall attach to or shall be incurred by, the
board members, directors, or employees, as such, of SLGFA or any successor
agency, or any of them, because of this Agreement or any Approved Note or
guarantee thereof.
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10. If Lender breaches the terms of this Agreement or the Policy and Procedures
Manual, SLGFA shall take such action as is necessary to protect its interests.
This action may include, but not be limited to implementation of the limitation,
suspension, or termination procedures set out in the Policy and Procedures
Manual in accordance with paragraph 12 of this agreement.
11. Any notice required or permitted by this Agreement shall be in writing and
shall be deemed to have been duly given if mailed, first class postage prepaid,
addressed, if to the SLGFA at 000 Xxxxx Xxxxxxx, Xxxxxx Xxxx, XX 00000-0000, or
if to Lender, at the address indicated below, or at such other address as may be
provided for in writing.
12. This Agreement may be terminated by either party upon not less than 60 days
written notice to the other party, and in a fashion which is consistent with the
Act and the Policy and Procedures Manual. Such termination shall not affect any
obligation incurred pursuant to this Agreement prior to the time that such
termination notice becomes effective. This agreement may be terminated by the
Secretary of Education upon 30 days notice if the Secretary makes a
determination under the Act that it is necessary to protect SLGFA's reserves.
13. This Agreement shall inure to the benefit of and be binding upon SLGFA and
the Lender and their respective successors and assigns. This Agreement shall not
be varied by oral agreement, but only by an instrument in writing duly executed
by the parties hereto. Any waiver or modification, express or implied by SLGFA
of any terms or condition contained in this Agreement, shall operate as such
only in the specific instance and shall not be construed as a waiver or
modification of any such condition generally or in any other instance. This
Agreement shall replace any Agreement to Guarantee Loans heretofore executed by
Lender with the SLGFA. This Agreement shall govern the rights and
responsibilities of the SLGFA and Lender on all loans guaranteed heretofore or
hereafter by the SLGFA.
14. This Agreement shall be construed to be entire, and shall revoke and
supersede any and all foregoing Agreements to Endorse Loans and any and all
foregoing Agreements to Guarantee Loans, whether oral or written. This Agreement
shall be construed under the laws of the State of Arkansas, or under Federal law
where applicable.
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In WITNESS WHEREOF, the Student Loan Guarantee Foundation of Arkansas and Lender
have each caused this Agreement to be executed the 30th day of January, 2002, by
their respective duly authorized officers.
STUDENT LOAN GUARANTEE
FOUNDATION OF ARKANSAS, INC.
Student Loan Finance Corporation and Subsidiaries (US Bank Trustee)
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Lender
By: /s/ Xxx Xxxxxx By: /s/ Xxxxxx X. Xxxxxxxx
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Signature Xxxxxx X. Xxxxxxxxx
Executive Director
02/22/2002
Xxx Xxxxxx, Corporate Trust Office
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Name and Title
000 Xxxxx Xxxx Xxxxxx Xxx 0000
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Street Address
Xxxxx Xxxxx, XX 00000-0000
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Xxxx, Xxxxx, Xxx
000000
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Lender Identification Number
00-0000000
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Employer Identification Number
5
