Exhibit 10.7
BLANKET CERTIFICATE OF LOAN GUARANTY
This Blanket Certificate of Loan Guaranty ("Certificate") is entered into
as of the 11TH day of MARCH, 2002 ("Effective Date"), by and between STUDENT
LOAN FINANCE CORPORATION & SUBSIDIARIES (US BANK, TRUSTEE) (833405) ("Lender")
and the NORTHWEST EDUCATION LOAN ASSOCIATION, a Washington non-profit
corporation ("NELA"), and supplements the "Agreement to Guarantee Loans" dated
03/22/1999 between NELA and Lender (the "Agreement").
Witnesseth:
WHEREAS, NELA guarantees FEEL Program loans made by the Lender if such loans are
made in accordance with the Agreement;
WHEREAS, NELA is now authorized to offer lenders the option to participate in an
alternate guarantee program which allows lenders to disburse loans prior to
NELA's receipt and review of loan data for such loans (the "Blanket Guarantee
Program");
WHEREAS, Lender wishes to participate in the Blanket Guarantee Program and NELA
has determined that it is appropriate to allow Lender to participate in this
program under the terms and conditions of this Certificate.
NOW THEREFORE, in consideration of the foregoing premises and the mutual
covenants contained in this Agreement, NELA and the Lender mutually agree that
the Agreement shall be amended and supplemented as follows:
l. Certificate as Addendum. This Certificate is an addendum to the Agreement
and is, therefore, incorporated into the Agreement and made a part thereof. In
the event of a conflict between the terms of the Agreement and this Certificate,
the terms of the Certificate shall prevail. Notwithstanding the incorporation of
this Certificate, the Agreement is intended to and does remain in full force and
effect. In this Certificate, unless this Certificate otherwise requires, all
definitions and provisions of the Agreement are controlling. Termination of the
Agreement terminates this Certificate. If this Certificate shall to any extent
be invalid or unenforceable, or if it is terminated, the Agreement shall not be
affected and shall continue in full force.
2. Blanket Guarantee. NELA agrees that within the limits established by this
Certificate and without further action by NELA, any FEEL Program loan (other
than a Consolidation Loan) which is eligible for insurance under the Act, Rules,
Regulations, and the Agreement ("Loan(s)"), shall, if designated by Lender as
being subject to this Certificate, be guaranteed against loss of principal and
interest by NELA to the maximum extent permitted by the Act and as set forth in
the Agreement as amended, provided that:
(a) prior to disbursing the Loan, the Lender did not know, and did not
have reason to know, that the borrower was not eligible to receive the Loan;
(b) prior to disbursing the Loan, the Lender determined to its
satisfaction, in accordance with reasonable and prudent business practices, that
the Loan was a legal, valid and binding obligation of the borrower;
(c) the Loan was made on or after the Effective Date of this Certificate,
but no later than the expiration or termination of this Certificate, the
Agreement, or the authority in the Act for participation in the Blanket
Guarantee Program; and
(d) the Loan is made to a student or the parent of a student enrolled or
accepted for enrollment at an eligible institution of higher education, as
defined in the Act ("Eligible Institution"), which has been notified by Lender
that loans made by Lender may be made through the Blanket Guarantee Program, and
such Eligible Institution has not terminated participation in the Blanket
Guarantee Program in accordance with Section 3 below.
3. Termination of School Participation. If an Eligible Institution requests
that Loans no longer be originated under the Blanket Guarantee Program, Lender
agrees to cease, within ten (10) business days of receiving such Eligible
Institution's request, origination of new Loans under the Blanket Guaranty
Program for students or parents of students enrolled or accepted for enrollment
at the Eligible Institution.
4. Reporting. Lender shall provide NELA information concerning Loans covered
by this Certificate within ten (10) business days of the date of the first
disbursement of the Loan. Lender shall also submit such other data and reports
to NELA or to the U.S. Department of Education as each may reasonably require to
evaluate the Blanket Guarantee Program, or that NELA may require to carry out
its responsibilities under the Act and Regulations.
5. Guarantee Date. Lender acknowledges and agrees that the date of guarantee
on Loans made under this Certificate shall be the date of Lender's approval of
the Loan. Lender also acknowledges that for purposes of National Student Loan
Data System ("NSLDS") reporting, the date of the Loan guarantee must equal or
precede the date of the first disbursement.
6. Loan Eligibility Edits and Borrower Ineligibility. NELA agrees to cooperate
in good faith with Lender or its designated agent to attempt to reconcile
discrepancies with respect to information regarding the Borrower's eligibility
to receive a Loan. NELA reserves the right to contact the Eligible Institution
at which the borrower is enrolled or accepted for enrollment to resolve such
discrepancies. If it is determined that the Lender has disbursed to the borrower
Loan funds for which he or she is ineligible, Lender shall engage in the
procedures required by 34 C.F.R. 682.412, or any successor or amendment thereto,
and any other applicable provisions of the Regulations and the Act, in order to
retain the guarantee on the Loan.
7. Termination of Guarantee. NELA reserves the right to terminate its
obligation to honor a claim made by Lender or a subsequent holder of a Loan made
under this Certificate if the Loan is determined to be ineligible for federal
reinsurance under the Act, Rules, or Regulations, or if the Lender fails, with
respect to the Loan, to adhere to the terms and conditions of this Certificate,
the Agreement, the Rules, Regulations, or the Act.
8. Limitation, Suspension, and Termination.
8.1. If, at any time, Lender proposes to no longer originate Loans under
this Certificate, it shall notify NELA and this Certificate may be terminated on
a mutually agreed upon date, which date shall be not later than thirty (30) days
after the notice to NELA.
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8.2. Lender's participation in the Blanket Guarantee Program may be
limited, suspended, or terminated by NELA in accordance with any limitation,
suspension, and termination standards and procedures set forth in this
Certificate, the Agreement, the Rules, Regulations, or the Act.
8.3. Notwithstanding any other provision herein, NELA may suspend
immediately the Lender's authority to originate insured loans under this
Certificate if NELA determines that the Lender is materially out of compliance
with this Certificate, the Agreement, the Rules, or any federal or state law or
regulations governing FFELP loans. NELA will notify the Lender in writing of any
such suspension within five (5) business days of the effective date of the
suspension. Such notice of suspension shall set forth the circumstances of
non-compliance. Upon a satisfactory resolution of such matter(s), NELA shall
reinstate Lender's authority to make insured loans pursuant to this Certificate
unless otherwise terminated hereunder.
8.4. This Certificate shall automatically terminate upon expiration of the
authority in the Act for the Blanket Guarantee Program.
8.5. Without limiting the foregoing, NELA may also terminate this
Certificate by giving Lender notice thirty (30) calendar days prior to the
effective date of termination.
8.6. Any limitation, suspension, termination, or expiration of this
Certificate will not affect NELA's guarantee on Loans made under this
Certificate prior to the effective date of the limitation, suspension,
termination, or expiration.
9. Audits. Lender will cooperate with any reasonable request from NELA for the
purpose of evaluating the Certificate's impact on ineligible borrowers receiving
loans made under the Blanket Guarantee Program. Such audits will be conducted
only upon reasonable prior notice to Lender, during reasonable business hours,
and at reasonable intervals.
10. Servicing Agreements. Any Fast Loan Application Guarantee Services
Agreement, Loan Disbursement Services Agreement, or PLUS Credit Services
Agreement and any amendments or addenda thereto, between NELA and the Lender
("Servicing Agreements") shall be inapplicable to Loans made under this
Certificate. NELA will not perform the services described in the Servicing
Agreements on the Loans guaranteed hereunder.
11. Captions. The captions and headings of the paragraphs of this Certificate
are for convenience and reference only and may not be used to interpret or
define the provisions hereof.
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IN WITNESS WHEREOF, NELA and the Lender have each caused this instrument to be
executed by their respective authorized officers on the date and year first
above written.
STUDENT LOAN FINANCE NORTHWEST EDUCATION
CORPORATION & SUBSIDIARIES LOAN ASSOCIATION
US BANK TRUSTEE (833405)
By: /s/ Xxxxx Xxxxxx By: /s/ Xxxxxxxx X. Xxxxxxxx
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Authorized Signature Xxxxxxxx X. Xxxxxxxx
Vice President,
XXXXX XXXXXX, EXECUTIVE VP Program Services
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Printed Name, Title
000 XXXXXXXXX XXXXX XXX
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Xxxxxxx
XXXXXXXX, XX 00000-0000
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City, State Zip
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