EXHIBIT 10.2
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
November 15, 1999 ("Agreement") is by and between COLLEGIATE FUNDING SERVICES,
LLC ("CFS"), and Citibank (New York State) as trustee for The Student Loan
Corporation (the "Bank").
CFS and the Bank 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").
The following provisions establish the terms, conditions and
responsibilities of CFS and the Bank with respect to the Bank'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 428C 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
which 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;
(2) the original Note (or certified copy thereof);
(3) evidence of Guarantee of the Loan by a Guarantor;
(4) evidence of full disbursement;
(5) in the case of a Master Promissory note, evidence of the
school's certification and the notification or confirmation
with respect to each Loan made thereunder;
(6) evidence of due diligence servicing in accordance with the
requirements of the Act and applicable Regulations; and
(7) repayment history, including, but not limited to, payment
transaction history and documentation of Deferments and
Forbearances.
E. "BUSINESS DAY" means any day, other than a Saturday, a Sunday or a
day on which banks located in the State of New York 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 428C 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 Trustee 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 to or on behalf
of a Borrower in one or more installments) to or on behalf of
Borrower, contingent upon an agreement to repay, evidenced by a Note
and Guarantee, which Loan was
originated in accordance with this Agreement and is a Consolidation
Loan under the GSLP and FFELP programs.
M. "NOTE" or "PROMISSORY NOTE" means a promissory note of 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 SunTech, Inc. or any subsequent loan servicer.
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.
4. Responsibilities of CFS:
CFS will act as Marketing Agent for Bank with respect to marketing
Consolidation Loans. As the Marketing Agent, CFS source potential
applicants, will 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 Bank hereby agree that the
Servicer and the Bank may rely fully upon CFS's certification of
eligibility with respect to all actions required of any party other than
Servicer or the Bank 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 regulations, and the
requirements of the Guarantor of the Loan.
C. Ensure accuracy and completeness of any electronically transmitted
data, and send by overnight courier to the Servicer on or before the
last business day of each week for delivery by 10:00 a.m. on the
first business day of the following
week, corresponding loan file folders for each Loan funded
electronically during such week.
D. Provide any missing documentation or information and promptly
correct any error identified by the Servicer or the Bank.
E. Maintain all license and other governmental approvals and otherwise
comply with the Act, applicable laws and regulations with respect to
all of its activities hereunder.
F. Act as custodian and bailee for the Bank with respect to all
original documents for Loans until all such documents are
transferred to Servicer. As bailee and custodian, CFS shall maintain
custody, control and safekeeping of such documents and such
documents shall be under the sole dominion and control of Bank. CFS
shall deal with such documents only as this agreement requires and
as Bank otherwise instructs in writing. With respect to applications
for Consolidation Loans which are declined, CFS will retain the
original application, adverse action notifications, and such other
documentation used in evaluating the application and determining
that the Loan could not be made. All actions by CFS with respect to
Applications shall conform to the requirements of law, including but
not limited to The Equal Credit Opportunity Act and the Higher
Education Act.
G. Subject to Section 8 of this Agreement, reimburse the Bank to the
extent of the principal balance, outstanding interest and fees paid,
any Loan deemed by any 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 or
CFS's action or failure to act or any lack of documentation or
incomplete documentation which made the Loan ineligible at the time
it was made. CFS's reimbursement obligation under this paragraph is
unconditional and not subject to offset, counterclaim, or
recoupment. All reimbursement payments shall be made in immediately
available funds within two Business Days after Bank's delivery of
written demand to CFS and shall be in an amount equal to the
outstanding principal amount and all accrued but unpaid interest on
the Loans repurchased, fees paid, and any Special Allowances to
which the Bank 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 Bank 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.
5. Responsibilities of the Bank:
Citibank (New York State) in its capacity as trustee and The Student Loan
Corporation in it's capacity as beneficiary will perform the duties and
adhere to the responsibilities outlined in this Agreement. The Student
Loan Corporation, as the beneficial owner and funding entity, shall be
obligated to provide daily funding for all loans offered by CFS under this
Agreement.
Citibank (New York State) has entered this Agreement solely in its
capacity as trustee for The Student Loan Corporation and not in its
individual capacity. Accordingly, all recourse and remedies of CFS under
this Agreement shall be available only against The Student Loan
Corporation and the assets of the trust established by such trust and not
against Citibank (New York State) in its individual capacity.
6. Responsibilities of the Servicer:
Any Servicer retained by Bank to serve the parties 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 Bank. The funding authorization shall
be in a form acceptable to the Bank and will be faxed by the
Servicer to the Bank (with the original to be forwarded later) at
least [30 minutes] prior to the latest time the Bank may initiate
its electronic funding transaction, provided that:
(1) The data provided electronically by CFS contains no errors or
problems which cause undue or unexpected delays;
(2) CFS has given Servicer at least one month's prior written
notice of additional Guarantors or one week's prior written
notice 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 which 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:
(4) Loan Consolidation Verification Certificate ("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.
(5) 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 Bank 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 Bank. This
Agreement shall in no way limit Servicer's obligations under any
servicing agreement or custody agreement.
7. Insurance:
CFS shall obtain and maintain in force until all Loans that Bank funds
hereunder are repaid in full or paid as a claim by a Guarantor, and upon
the request of the Bank furnish proof of, errors and omissions and
liability insurance policies acceptable to the Bank providing coverage per
occurrence (with not more than $10,000 deductible), with respect to claims
by Bank or Servicer, 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 Bank
and Servicer. 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 Bank
and Servicer.
8. Reimbursement Procedure:
F. If the Bank determines that CFS is obligated to reimburse any Loan
pursuant to Section 4.G. hereof, the Bank shall:
(6) Notify CFS in writing of the reason for CFS's obligation to
reimburse and CFS shall have 90 days after receipt of such
notice to cure the cause of its obligation to reimburse such
Loan.
(7) In the case of notice from Servicer, notify the Bank, in
writing, of the reason for CFS's obligation to reimburse and
follow Bank's instructions with respect to the Loan, any
extension of the cure period or other actions determined to be
appropriate by the Bank.
9. Loan Size:
Borrowers must have Loan indebtedness of at least $[****]. The Marketing
Agent agrees to maintain an average application size of $[****] which the
Bank will review quarterly. Should the average Application amount remain
below $[****] for two consecutive quarters, the Bank 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:
The Marketing Agent shall endeavor to use the original Guarantor on the
Consolidating Loans where possible and practical. In all other cases, the
Marketing Agent agrees to use any Guarantor accepting national
consolidation guarantees and with whom the Bank has an agreement.
It is contemplated that SunTech, Inc. will act as the initial Servicer for
loans under the RWCL Program.
Recognizing the importance of the Bank's brand and name awareness in the
states where the Bank or its affiliate banks have a banking presence,
there may be occasions when the Bank may be forced to use certain
Guarantors and Servicers due to extremely strong school preferences or
other arrangements in place in those states. The Bank and Marketing Agent
agree to work in good faith with regard to selection of Guarantors and
Servicers used for accounts for Borrowers attending schools in these
states.
11. Funding:
The Bank agrees to fund [****] offered by CFS beginning December 1, 1999.
12. Borrower Benefits:
The Bank agrees to provide incentives to Borrowers of Consolidation Loans
made under the RWCL Program to pay their Loans in a timely manner by
reducing the interest rate on the Loan after 60 consecutive on-time
payments according to the following schedule:
For Balances of: Rate Reduction:
---------------- ---------------
$10,000 to $15,000 25 basis points (1/4%)
$15,001 to $20,000 50 basis points (1/2%)
$20,001 to $25,000 75 basis points (3/4%)
$25,001 and greater 100 basis points (1%)
No additional benefits shall be extended to those Borrowers selecting
electronic drafting of their payments. Borrowers must maintain on-time
payments to continue to qualify for the rate reduction. "On-time" payment
is considered to be one that is made prior to the 15th day of delinquency.
The 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. Application Fee:
The Bank agrees to pay an application fee of $[****] for each successfully
completed application, except for those where the Bank is the original
lender; then the fee shall be $[****]. "Successfully completed
application" means an application for a Consolidation Loan from an
eligible borrower in which the Marketing Agent and Bank have all of the
required documentation to make the Loan, regardless of whether it is
actually made or not.
14. Minimum Volume Commitments:
CFS shall offer at least [****]dollars ($[****]) per annum to the Bank for
funding.
15. Marketing:
G. Marketing the RWCL Program is the responsibility of the Marketing
Agent, subject to the following conditions. The Bank 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. The Bank reserves the right to have its student lending
marketing representatives market the RWCL Program, who will do so
only in coordination with the other marketing activities of the
Marketing Agent.
H. The Bank hereby grants to the Marketing Agent, a limited,
non-exclusive, non-transferable, royalty-free license, during the
term of this Agreement (including any extensions and renewals
hereof), to use the Bank's name and other trademarks and service
marks identified on Schedule A attached hereto (the "Licensed
Marks") on marketing and promotional materials related to the RWCL
Program (the "Marketing Materials").
(8) In order to insure that the use of the Licensed Marks is in
compliance with the terms and conditions of this Agreement,
and in order to protect the Licensed Marks, the Marketing
Agent shall submit to the Bank for prior approval (such
approval not to be unreasonably withheld or delayed) samples
or specimens of all Marketing Materials produced by, on behalf
of, or at the direction of the Marketing Agent which use the
Licensed Marks. In no event shall Marketing Materials that use
the Licensed Marks be distributed or published without the
Bank's prior approval.
(9) Marketing Agent acknowledges the Bank's ownership of the
trademark and service xxxx right, trade name rights,
copyrights and all other proprietary rights in and to the
Licensed Marks, and agrees that during the term of this
Agreement (including any extension or renewals hereof) and
thereafter, neither Marketing Agent nor any affiliate or other
person
claiming through Marketing Agent shall knowingly take, or
acquiesce in, any action that is or might be inconsistent with
the Bank's exclusive ownership of such rights. Marketing Agent
agrees that nothing in this Agreement shall give Marketing
Agent or any affiliate or person claiming through Marketing
Agent, any right, title, or interest in and to the Licensed
Marks, other than the right to use such Licensed Marks in
accordance with this Agreement.
(10) Marketing Agent acknowledges that the Bank has established
prestige and goodwill in the Licensed Marks, and it is of the
utmost importance to the Bank that the high standards and
reputation associated with the Licensed Marks be maintained at
all times.
(11) The Bank shall be responsible for and retain sole discretion
over filing and maintenance of the Licensed Marks and any
infringement or other legal proceedings with respect to the
Licensed Marks; provided, however, that Marketing Agent agrees
to assist the Bank in any reasonable way, at the Bank's
expense, in establishing, securing, evidencing, perfecting,
registering, and defending against infringement of the Bank's
rights in the Licensed Marks.
16. Regulatory Changes:
If regulatory or legislative changes to the Higher Education Act occur
which prevent the Bank from realizing sufficient profit from the RWCL
Program, the Bank has the option to withdraw from the RWCL with 120 days
prior written notice to CFS. If legal or regulatory changes prohibit,
limit or alter the compensation provisions for the services rendered by
CFS to Bank, either party shall have the option to negotiate an amendment
to the Agreement or withdraw from the RWCL Program with 120 days prior
notice to the other party.
17. Invoicing:
CFS shall invoice each Friday for all loans processed during that week.
Bank agrees to execute a wire transfer of funds for all invoices within
five business days of receipt of invoice.
18. 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,
telecommunications, data entry, sales and related expenses incurred with
respect to its marketing activities.
19. 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.
20. Representations, Warranties, and Covenants of CFS:
CFS represents and warrants each of the following to the Bank on the date
of this Agreement, on the date of each request for Bank to originate and
fund any Loan and on the date of Bank's funding of any Loan:
I. 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.
J. 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.
K. This Agreement will, upon execution and delivery by all parties
thereto, constitute a legal and binging obligation of CFS,
enforceable against CFS according to its terms.
L. 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.
M. All tax returns of CFS required to be filed have been filed (or
extensions have been granted) before delinquency and all taxes
imposed upon CFS that are due and payable have been paid before
delinquency, other than taxes which are being contested in good
faith by lawful proceedings diligently conducted and against which
reserve or other provision required by GAAP has been made and in
respect of which levy and execution of any lien have been and
continue to be stayed.
N. Each Loan CFS requests to be originated and funded by Bank (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 from any defense, dispute, setoff, or
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 Bank the following: until all
Loans that Bank funds hereunder have been repaid in full or paid as a
claim by a Guarantor, CFS or transferred by the Bank to another entity
agrees as follows:
O. CFS shall cause to be furnished to the Bank such financial
statements as the Bank may reasonably request, including annual
audited financial statements and such other information with respect
to its business affairs, assets, and liabilities.
P. CFS shall maintain books, records and accounts necessary to prepare
financial statements according to GAAP.
Q. Upon reasonable request CFS shall allow Bank (including Bank'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.
R. CFS shall (i) maintain its corporate existence (such that there
shall not be any mergers or acquisitions in which CFS is not the
surviving entity) and good standing in its state of organization,
and (ii) maintain all licenses, permits, and franchises necessary
for its business.
21. Representations and Warranties of Bank:
Bank represents and warrants to CFS on the date of this Agreement, on the
date of each request for Bank to originate and fund any Loan, and on the
date of Bank's funding of any Loan:
S. Citibank (New York State) in its capacity as trustee (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 as a New York banking corporation; 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. The Student Loan Corporation (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 as a Delaware corporation; 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.
T. The execution and delivery by Bank of this Agreement and the
performance by it of its obligations hereunder (i) are within its
banking 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.
U. This Agreement will, upon execution and delivery by all
parties thereto, constitute a legal and binding
obligation of Bank, enforceable against Bank according
to its terms.
V. Bank 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.
22. Notice:
All notices given under this Agreement shall be in writing and shall be
sent by certified mail, return receipt requested 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. Xxxx Xxxxxxx, CEO
Collegiate Funding Services, LLC
0000 Xxxxx Xxxx, Xxxxx 000
Xxxxxxxxxxxxxx, Xxxxxxxx 00000
If to Bank:
c/o Mr. Yiannis Zographakis, CFO
The Student Loan Corporation
000 Xxxxxxxxxx Xxxx., xxxxx xxxxx
Xxxxxxxx, XX 00000
23. 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.
24. Term:
The parties agree that the term of the Agreement shall be for three (3)
years from December 1, 1999, with automatic options to extend for two (2),
one-year periods unless one of the parties notifies the others in writing
of their intent not to renew at least 90 days prior to the expiration of
the contract.
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 unremedied for 60 days; or
(c) Either party shall fail to pay an principal of or premium or
interest on any debt or other obligation when the same becomes due
and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the
agreement or instrument relating to such debt or obligation; or any
other event shall occur or condition shall exist under any agreement
or instrument relating to any such debt or obligation and shall
continue after the applicable grace period, if any, specified in
such agreement or instrument, if the effect of such event or
condition is to accelerate, or to permit the acceleration of, the
maturity of such debt or obligation; or any such debt or obligation
shall be declared to be due and payable, or required to be prepaid
(other than by a regularly scheduled required prepayment), redeemed,
purchased or defeased, or an offer to prepay, redeem, purchase or
defease such debt or obligation shall be required to be made, in
each case prior to the sated maturity thereof; or
(d) 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 of 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
(e) Any judgment or order for the payment of money in excess of $100,000
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
(f) Either party suspends its normal operations; or
(g) 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, provided however, that
party receiving notice of termination under this subparagraph (g)
shall have the first 30 days after receiving notice to either cure
such adverse change or to convince the party giving notice that the
adverse change does not affect its ability to perform under the
Agreement.
25. Ownership Changes:
Should ownership of either CFS or The Student Loan Corporation change by
50% (or controlling interest) of either, notification is required within
30 days by the party subject to the change to the other party. This
contract is assignable by either party upon written consent of the other
party, which consent shall not be unreasonably withheld, provided however,
that Bank may assign this Agreement to any entity within the common
corporate control of Citigroup, Inc. which has the power and agrees to
perform all the duties and obligations of the Agreement.
26. 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.
27. 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.
28. Agency:
The parties acknowledge that nothing herein is intended to authorize CFS
or the Bank 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 the Bank
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.
29. 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 State of Delaware
without regard for its conflict of laws statute.
Entered into as of this Fifteenth day of November, 1999.
CITIBANK (NEW YORK STATE), AS TRUSTEE FOR THE STUDENT LOAN CORPORATION
By /s/ Xxxxxxx X. Xxxx
----------------------------------------------------
Xxxxxxx X. Xxxx
Vice President & General Counsel Citibank (NYS)
The Student Loan Corporation
By /s/ Yiannis Zographakis
----------------------------------------------------
Mr. Yiannis Zographakis, CFO
COLLEGIATE FUNDING SERVICES, LLC
By /s/ Xxxx X. Xxxxxxx
----------------------------------------------------
Xxxx X. Xxxxxxx, CEO
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.
AMENDMENT AGREEMENT
This Amendment Agreement is entered into as of March 1, 2001 among
Citibank (NYS) as trustee for The Student Loan Corporation ("Bank"), The Student
Loan Corp. ("SLC") and Collegiate Funding Services, LLC ("CFS").
WHEREAS, the Bank, SLC and CFS are parties to a certain
Consolidation Loan Origination Responsibility Agreement dated as of November 15,
1999 (the "Agreement") which provides for the 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 Bank and SLC believe that the Federal Department of
Education periodically provides direct competition to the FFELP Consolidation
Loans made by private lenders through discounted rates in the Federal Direct
Loan Program ("FDL Program"); and
WHEREAS, CFS does not agree that any past changes to the FDL Program
represents an event that could provide the basis to trigger any right to
negotiate an amendment or a right to withdraw pursuant to Section 16 of the
Agreement; and
WHEREAS, SLC by letter dated November 7, 2000 gave notice to CFS
pursuant to the first sentence of Section 16 of the Agreement of its intention
to withdraw from the RWCL Program effective March 7, 2001 due to alleged
regulatory changes by the Federal Department of Education in Consolidation Loans
offered through the FDL Program; and
WHEREAS, the parties desire to terminate SLC's notice of intention
to withdraw from the RWCL Program, to amend the Agreement, and to settle and
mutually release all claims of the parties with respect to such decision by SLC
and the parties' respective actions related thereto, all as hereinafter set
forth in greater detail.
NOW THEREFORE, in consideration of the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is acknowledged by each party, the parties
agree as follow:
1. Bank and SLC agree to withdraw and terminate the notice of withdrawal dated
November 7, 2000 from the RWCL Program and to continue funding Consolidation
Loans made under the RWCL Program as provided in the Agreement, as modified by
the terms of this Amendment Agreement.
2. Section 11 of the Agreement (Funding) is hereby amended, effective as of
March 1, 2001, to read as follows:
11. Funding:
The Bank and SLC agree to fund eligible RWCL Program loans offered
by CFS based on the following schedule,
a) for the month of March 2001, disbursements of RWCL Program
Consolidation Loans in an amount not to exceed $[****];
b) for the month of April 2001, disbursements of RWCL Program
Consolidation Loans in an amount not to exceed $[****];
c) for the month of May 2001, disbursements of RWCL Program
Consolidation Loans in an amount not to exceed $[****];
d) for the remaining term of the Agreement, as amended by the
Amendment Agreement, disbursements of RWCL Program
Consolidation Loans shall not exceed $[****] per calendar
month.
The Bank and SLC shall have no obligation to fund RWCL Consolidation Loans
offered by CFS which exceed the monthly limits described above.
3. Section 12 of the Agreement (Borrower Benefits) is hereby amended effective
June 1, 2001, by deleting all of such section except the last four (4)
sentences, and inserting in lieu thereof the following:
12. Borrower Benefits:
With respect to Loans made after June I, 2001, the Bank and
SLC agree to provide incentives to Borrowers of Consolidation
Loans made under the RWCL Program to pay their Loans in a
timely manner by reducing the interest rate in the amount of
one percent (1%) per annum on the Loan for the remaining term
after the first 36 consecutive on-time payments. In addition,
for those Borrowers who elect to participate in an electronic
or automatic payment program offered by Bank, SLC or Servicer
with respect to the RWCL Program Consolidation Loan, Bank and
SLC shall reduce the interest on such Loan by one-quarter
percent (0.25%) per annum for such time as the Borrower
remains in the electronic or automatic payment plan.
The last four (4) sentences of Section 12 remained unamended.
4. Section 13 of the Agreement (Application Fee) is hereby amended by reducing
the amount $[****] to $[****] and reducing the amount $[****] to $[****];
effective for all RWCL Program Loan applications offered for funding by Bank and
SLC after June 1, 2001 on which the borrower benefits have been increased as
provided in Section 4 of this Amendment Agreement.
5. Section 14 of the Agreement (Minimum Volume Commitments) is hereby [****],
effective immediately.
6. Section 24 of the Agreement (Term) is hereby amended by adding at the end of
the first paragraph thereof: "Notwithstanding the foregoing, this Agreement may
be terminated on or after December 31, 2001 by Bank and SLC giving 45 days prior
written notice to CFS."
7. CFS agrees that it shall not select the RWCL Program Loan applications to be
funded by Bank and SLC on any adverse or other basis which would have the effect
of increasing the risk of loan default, increasing the risk of payment
delinquency, or on any other basis compared to all RWCL Programs Loans offered
to all participating lenders. Notwithstanding the foregoing, nothing contained
herein shall prevent CFS from placing certain loans with Bank or with other
lenders participating in the RWCL Program for the purpose of maintaining the
Average Borrower Indebtedness required by the Agreement and any agreement CFS
has or may have with any other lender.
8. CFS represents and warrants to Bank and SLC that it has not conditioned the
participation of other lenders in the RWCL Program upon Bank and SLC's continued
participation as a RWCL Program lender, and that it has not represented to
existing or potential RWCL Program lenders that Bank and SLC will remain as a
lender under the RWCL Program.
9. Settlement and Mutual Release.
Bank (solely in its capacity as trustee), SLC and CFS acknowledge that
this Amendment Agreement and the terms contained herein are intended to resolve
all claims of the respective parties regarding SLC's decision to withdraw from
the RWCL Program as provided in its letter to CFS dated November 7, 2000 and any
other released Claims as defined below. In consideration of the execution of
this Amendment Agreement and the parties' covenants and agreements contained
therein, each of parties on behalf of itself and its successors, assigns,
parents, corporate affiliates, representatives, beneficiaries hereby release,
discharge and promise not to xxx any other party or its employees, officers,
agents, successors, assigns, representatives, parents, beneficiaries or
corporate affiliates with respect to any right, claim, charge or action, whether
known or unknown, which any party may have against the other relating solely to
the proposed withdrawal of Bank and SLC from the RWCL Program as announced in
SLC's letter to CFS dated November 7, 2000, and all actions which any party may
have taken in connection therewith or response thereto, including but not
limited to the negotiation and terms of this Amendment Agreement, the reduction
in the amount of loans funded and to be funded, the reduction of the application
fees, the increase of borrower benefits, and the costs, expenses and attorney
fees related to any of the above (collectively the "Released Claims"). Each
party represents and warrants that it has been represented by counsel of its
choice, has read the terms of this settlement agreement and understands the
terms used herein. The parties together agree that this settlement and release
constitutes the entire understanding of the parties with respect to the Released
Claims.
Nothing contained in this settlement and mutual release is intended, nor
shall it, release, remove, modify, alter, or amend any obligation, duty, or
responsibility of any party as set forth in the Agreement as modified by the
Amendment Agreement except as specifically provided in this Amendment Agreement.
It is acknowledged by the parties that the Agreement, as modified, contains
various obligations by the parties with respect to the marketing, servicing and
funding of RWCL Program loans which are not affected by the settlement and
mutual release, and that
the settlement and mutual release provided above is intended to release only the
Released Claims.
IN WITNESS WHEREOF, THE PARTIES HAVE SET THEIR HANDS THIS 7th DAY OF MARCH 2001.
Collegiate Funding Services, LLC
/s/ Xxxx X. Xxxxxxx
--------------------------------------------------
By Xxxx X. Xxxxxxx
CEO
Citibank (New York State) as trustee for The Student Loan Corporation
/s/ Xxxxxxx X. Xxxx
--------------------------------------------------
By Xxxxxxx X. Xxxx
Vice President
General Counsel
Citibank (NYS)
The Student Loan Corporation
/s/ Xxxxxx X. Xxxxx
--------------------------------------------------
By Xxxxxx X. Xxxxx
VP & Chief Financial 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.
2nd Amendment Agreement
This Amendment Agreement is entered into as of November 1, 2001 among
Citibank (NYS) as trustee for The Student Loan Corporation ("Bank"), The Student
Loan Corporation ("SLC") and Collegiate Funding Services, LLC ("CFS").
WHEREAS, the Bank, SLC and CFS are parties to a certain Consolidation Loan
Origination Responsibility Agreement dated as of November 15, 1999 (the
"Agreement") which provides for the marketing, servicing and funding of
Consolidation Loans pursuant to the provisions of the Federal Family Education
Loan Program ("FFELP") through CFS' program generally known as the Real World
Consolidation Loan Program ("RWCL Program"); and
WHEREAS, the Agreement was amended by that certain Amendment Agreement
dated as of March l, 2001 and executed on March 7, 2001 by and between the
parties hereto; and
WHEREAS, the parties desire to amend the Agreement as amended for the
mutual benefit of the parties, all as hereinafter set forth in greater detail.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which is acknowledged by each party, the parties agree as follow.
10. The definition of "Servicer" contained in Section 3.Q. of the Agreement is
hereby amended to read as follows:
"Servicer" means any loan servicer identified by Bank or SLC as the
designated loan servicer of any Loan or Loans originated under the
Agreement. If CFS creates or acquires a student loan servicer capable of
servicing Consolidation Loans to the reasonable satisfaction of Bank and
SLC, which shall include the ability to support securitization reporting,
CFS shall have the right to designate for loan servicing up to $[****] per
calendar year or [****] ([****]%) of the aggregate annual consolidation
loan volume, whichever is greater, to such loan servicing entity; provided
however, that in no event shall CFS have any right of designation if the
outstanding dollar amount of Loans held by Bank or SLC or its
securitization trustee and serviced at such entity exceeds [****]% of the
dollar amount of all loan balances serviced by such entity.
11. Section 11 of the Amendment Agreement (Funding) is hereby amended effective
August 1, 2001, to read as follows:
11. Funding
The Bank and SLC agree to fund eligible RWCL loans offered by CFS based on the
following:
For the term of the Agreement, as amended, Bank and SLC agree to fund
disbursement on Loans up to but not exceeding the amount of $[****] per calendar
month or $[****] per calendar year.
12. Section 12 of the Amendment Agreement (Borrower Benefits) is hereby amended,
effective August 1, 2001, to read as follows:
12. Borrower Benefits:
The Bank agrees to provide incentives as described in this Section 12 to
Borrowers of Consolidation Loans made under the RWCL Program to pay their
Loans in a timely manner. Under Borrower Incentive Plan A, after making
the first 60 monthly scheduled payments on- time, Borrowers shall receive
an interest rate reduction up to but not greater than the following on the
then remaining balance of the Loan:
Original Loan Balance Interest Rate Reduction
--------------------- -----------------------
$10,000 to $15,000 1/4 %
$15,001 to $20,000 1/2 %
$20,001 to $25,000 3/4 %
$25,001 and greater 1%
Under Borrower Incentive Plan B, after making the first 36 monthly
payments on-time, Borrowers shall receive an interest rate reduction up to
but not greater than 1 % on the then remaining balance of the Loan
regardless of the Original Loan Balance.
Under any Incentive Plan, Borrowers must 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 a .25% rate reduction upon the commencement of electronic
drafting for Consolidation Loan payment purposes. Said .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 will provide Bank with written notification at least 30 days prior to
the effective date for switching between Incentive Plans or any variation
in the rates or terms of the effective Incentive Plan up to the maximum
borrower discount in such plan. The Application receipt date shall, except
to the extent the Borrower directs otherwise in writing during the 30-day
period preceding a "changeover" of plans, determine which Incentive Plan
terms apply to such Application.
CFS shall have sole and exclusive responsibility and liability for
accurately communicating to each Borrower which Incentive Plan terms 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.
The Servicer shall 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. Section 13 of the Amendment, August 1, 2001, to read as follows:
13. Application Fee:
CFS shall receive an application fee of $[****] for every successfully
completed application under Plan A. If the bank is the original lender,
then the fee shall be $[****] for each successfully completed application
under Plan A.
CFS shall receive an application fee of $[****] for every successfully
completed application under Plan B. If the bank is the original lender,
then fee shall be $[****] for each successfully completed application
under Plan B.
The application fee shall be reduced by $[****] under any program where
the borrower is eligible for a rate reduction of 0.25% for automatic
electronic payment and accepts the offer.
14. Section 14 (Minimum Volume Commitment) is hereby amended, effective August
1,2001, to read as follows:
14. Minimum Volume Commitment:
CFS shall offer to Bank Successfully Completed Applications aggregating at
least $[****] per calendar year annually. Should CFS not place with Bank
Successfully Completed Applications totaling at least $[****] dollars per
calendar year annually, then the Bank may cancel the contract with 120
days notice. There shall be no other penalty for any failure by CFS to
achieve the minimum annual disbursement figure.
15. Section 16 (Regulatory Changes) is hereby amended to read as follows:
16. Regulatory Changes:
If regulatory or legislative changes occur to the FFELP consolidation
program which renders the Bank and/or CFS unable to continue the RWCL
Program in compliance with the law, or directly and negatively impacts the
Bank's or CFS' profit margin, the Bank and CFS shall make a good faith
effort to restructure this Agreement to bring Bank and CFS into compliance
with the law within the RWCL, or renegotiate the pricing structure. If
Bank 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, Bank and/or CFS shall have the option to withdraw from the
RWCL Program with 120 days prior written notice to the other. If
legislative or regulatory changes prohibit, limit or alter the
compensation provisions for the services rendered by CFS to Bank, either
party shall have the option to negotiate an amendment to the Agreement or
withdraw from the RWCL Program with 120 days prior notice to the other
party.
16. Section 20 (Representations, Warranties and Covenants of CFS) is hereby
amended to read as follows:
K. The Loans made and selected for consolidation with Bank and
SLC have not been made or selected based on the school or type of school
attended by the borrower, the payment delinquency status of loans being
consolidated, adverse FICO scores, or marketing directed specifically at
loans held by Bank or SLC.
17. The amendment to Section 24 (Term) as contained in the Amendment Agreement
is hereby revoked. The first paragraph of Section 24 (Term) is hereby amended to
read as follows:
The parties agree that the term of the Agreement, as amended hereby, shall
be from the date first written above until the close of business on
December 31, 2004.
18. Nothing contained in this 2nd Amendment Agreement is intended, nor shall it,
release, remove, modify, alter, or amend any obligation, duty, or responsibility
of any party as set forth in the Agreement as modified by the Amendment
Agreement except as specifically provided in this 2nd Amendment Agreement. It is
acknowledged by the parties that the Agreement, as amended, contains various
obligations by the parties with respect to the marketing, servicing and funding
of RWCL Program loans. This 2nd Amendment Agreement may be executed in
counterparts, each of which may be a fax copy of an original but all of which,
taken together, shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have set their hands this 19th day of October
2001.
Collegiate Funding Services, LLC
/s/ J. Xxxxx Xxxxxx
--------------------------------------------------
By Xxxxx Xxxxxx
President
Citibank (New York State) as trustee for The Student Loan Corporation
/s/ Xxxxxxx X. Xxxx
--------------------------------------------------
By Xxxxxxx X. Xxxx
Vice President
General Counsel
Citibank (NYS)
The Student Loan Corporation
/s/ Xxxx Xxxxxxxx
--------------------------------------------------
By Xxxx Xxxxxxxx
Chairman
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.
3rd Amendment Agreement
This Amendment Agreement is entered into as of May 7, 2002 among Citibank (New
York State), as Trustee for The Student Loan Corporation ("Bank"), The Student
Loan Corporation ("SLC") and Collegiate Funding Services, LLC ("CFS").
WHEREAS the Bank, SLC and CFS are parties to a certain Consolidation Loan
Responsibility Agreement dated as of November 15, 1999 (the "Agreement") which
provides for the marketing, servicing and funding of Consolidation Loans
pursuant to the provisions of the Federal Family Education Loan Program
("FFELP") through CFS' program generally known as the Real World Consolidation
Loan Program ("RWCLP"); and
WHEREAS the Agreement was amended by that certain Amendment Agreement dated as
of March l, 2001 and executed March 7, 2001 and by the 2nd Amendment Agreement
dated as of November 1, 2001 and executed November 19, 2001 by and between the
parties; and
WHEREAS the parties desire to amend the Agreement for the mutual benefit of the
parties as hereinafter set forth in greater detail.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by each party, the parties agree as
follows:
1. Section 11 of the 2nd Amendment Agreement is hereby amended effective July
1, 2002, to read as follows:
"11. Funding.
The Bank and SLC agree to fund eligible RWCL loans offered by CFS based on
the following:
For the term of the Agreement, as amended, Bank and SLC agree to fund
disbursement on Loans up to but not exceeding $[****] per calendar month and up
to but not exceeding $[****] per calendar year 2002, and up to but not exceeding
$[****] per calendar month and up to $[****] per calendar year thereafter for
the remaining term of the Agreement."
2. Nothing contained in this 3rd Amendment Agreement is intended, nor shall
it, release, remove, modify, alter, or amend any obligation, duty, or
responsibility of any party as set forth in the Agreement as modified by the
Amendment Agreement or the 2nd Amendment Agreement except as specifically
provided in this 3rd Amendment Agreement. It is acknowledged by the parties that
the Agreement as amended, contains various obligations by the parties with
respect to the marketing, servicing, and funding of RWCL Program loans.
3. This 3rd Amendment Agreement may be executed in counterparts, each of
which may be a fax copy of an original but all of which, when taken together,
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have set their hands this _______ day of
June, 2002.
Collegiate Funding Services, LLC
/s/ J. Xxxxx Xxxxxx
-----------------------
J. Xxxxx Xxxxxx
Chief Executive Officer
Citibank (New York, State) as trustee for The Student Loan Corporation
By: /s/ Xxxx Xxxxxxxx
--------------------------------------------------
Name: Xxxx Xxxxxxxx
Title: Chairman
The Student Loan Corporation
By: /s/ Xxxx Xxxxxxxx
--------------------------------------------------
Name: Xxxx Xxxxxxxx
Title: Chairman
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.
4th Amendment Agreement
This Amendment Agreement is entered into as of July 25, 2002 among Citibank (New
York State), as Trustee for The Student Loan Corporation ("Bank"), The Student
Loan Corporation ("SLC") and Collegiate Funding Services, LLC ("CFS").
WHEREAS the Bank, SLC and CFS are parties to a certain Consolidation Loan
Responsibility Agreement dated as of November 15, 1999 (the "Agreement") which
provides for the marketing, servicing and funding of Consolidation Loans
pursuant to the provisions of the Federal Family Education Loan Program
("FFELP") through CFS' program generally known as the Real World Consolidation
Loan Program ("RWCLP"); and
WHEREAS the Agreement was amended by an Amendment Agreement dated as of March 1,
2001 and executed March 7, 2001, by the 2nd Amendment Agreement dated as of
November 1, 2001 and executed November 19, 2001, and by a 3rd Amendment
Agreement dated as of May 7, 2002 and executed July 25, 2002 by and between the
parties; and
WHEREAS the parties desire to further amend the Agreement for the mutual benefit
of the parties as hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by each party, the parties agree as
follows:
1. Section 12 of the 2nd Amendment Agreement is hereby amended effective July
25, 2002, to add an additional Incentive Plan C by adding the following
paragraph between the paragraph beginning " Under Incentive Plan B..." and that
paragraph beginning "Under any Incentive Plan..." to read as follows:
"Under Borrower Incentive Plan C, after making the first 48 monthly
payments on time, Borrower shall receive an interest rate reduction up to
but not greater than 1% on the remaining balance of the Loan regardless of
the original Loan Balance.
2. Section 13 of the 2nd Amendment Agreement is hereby amended effective July
25, 2002, to add the following paragraph between the 2nd and 3rd paragraph of
Section 13:
"CFS shall receive an application fee of $[****] for every successfully
completed application under Plan C. If the Bank is the original lender,
then the fee shall be $[****] for each successfully completed application
under Plan C.
If a Loan is a consolidation of a previous Loan that CFS originated for
Bank that includes an additional loan of the borrower that is added to the
original Loan to constitute the new
Loan, then CFS shall receive an application fee of $[****] for every
successfully completed application under either Plans A, B or C."
3. This 4th Amendment Agreement may be executed in counterparts, each of which
may be a fax copy of an original but all of which, when taken together, shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have set their hands this __ day of July 2002.
Collegiate Funding Services, LLC
/s/ J. Xxxxx Xxxxxx
-----------------------
J. Xxxxx Xxxxxx
Chief Executive Officer
Citibank (New York, State) as trustee for The Student Loan Corporation
By: /s/ Xxxxxxx X. Xxxx
--------------------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President and General Counsel Citibank (NYS)
The Student Loan Corporation
By: /s/ Yiannis Zographakis
--------------------------------------------------
Name: Yiannis Zographakis
Title: 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.
5th Amendment Agreement
This Amendment Agreement is entered into as of August 20, 2002 among Citibank
(NYS) as Trustee for The Student Loan Corporation ("Bank"), The Student Loan
Corporation ("SLC") and Collegiate Funding Services, LLC ("CFS").
WHEREAS the Bank, SLC and CFS are parties to a certain Consolidation Loan
Responsibility Agreement dated as of November 15, 1999 (the "Agreement") which
provides for the marketing, servicing and funding of Consolidation Loans
pursuant to the provisions of the Federal Family Education Loan Program
("FFELP") through CFS' program generally known as the Real World Consolidation
Loan Program ("RWCLP"); and
WHEREAS the Agreement was amended by a 1st Amendment Agreements dated as of
March 1, 2001 and executed March 7, 2001, by the 2nd Amendment Agreement dated
as of November 1, 2001 and executed November 19, 2001, by a 3rd Amendment
Agreement dated as of May 7, 2002 and executed July 25, 2002 and by a 4th
Amendment Agreement dated as of July 25, 2002 and executed July 31, 2002 by and
between the parties.
WHEREAS the parties desire to further amend the Agreement for the mutual benefit
of the parties to permit CFS to offer any or all of the Borrower Incentive Plans
at any time as hereinafter set forth in greater detail.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by each party, the parties agree as
follows:
Section 12 of the 2nd and 4th Amendment Agreements are hereby amended, effective
November 12, 2002, to read as follows:
"12. Borrower Benefits:
The Bank agrees to provide incentives as described in this Section 12 to
Borrowers of Consolidation Loans made under the RWCL Program to pay their Loans
in a timely manner. Under Borrower Incentive Plan A, after making the first
60 monthly scheduled payments on-time, Borrowers shall receive an interest rate
reduction up to but not greater than the following on the remaining balance of
the Loan:
Original Loan Balance Interest Rate Reduction
--------------------- -----------------------
$10,000 to $15,000 1/4%
$15,001 to $20,000 1/2%
$20,001 to $25,000 3/4%
$25,001 and greater 1%
Under Borrower Incentive Plan B, after making the first 36 monthly payments
on-time, Borrowers shall receive an interest rate reduction up to but not
greater than 1% on the then remaining balance of the Loan regardless of the
Original Loan Balance.
Under Borrower Incentive Plan C, after making the first 48 monthly payments on
time, Borrower shall receive an interest rate reduction up to but not greater
than 1% on the remaining balance of the Loan regardless of the Original Loan
Balance.
CFS may offer one or more of the Borrower Incentive Plans at any time during the
term of this Agreement.
Under any Borrower Incentive Plan, Borrowers must 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 Borrower Incentive Plan, CFS may, but is not required to offer
Borrowers a 0.25% 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 shall have the sole and exclusive responsibility and liability for
accurately communicating to each Borrower which Borrower Incentive Plans apply
to the Borrower's Loan. CFS shall clearly and conspicuously xxxx the electronic
and/or paper records supporting each Loan to identify the Borrower Incentive
Plan terms that apply to such Loan and ensure communication of same to the
designated Servicer. CFS will invoice the corresponding Borrower Incentive
Plan's associated application fee.
The Servicer shall 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."
2. This 5th Amendment Agreement may be executed in counterparts, each of which
may be a fax copy of an original but all of which, when taken together, shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have set their hands this 12th day of November
2002.
Collegiate Funding Services, LLC
/s/ J. Xxxxx Xxxxxx
--------------------------------------------------
J. Xxxxx Xxxxxx
Chief Executive Officer
Citibank (New York State) as Trustee for The Student Loan Corporation
By: /s/ Xxxxxxxx Xxxxxxxx
--------------------------------------------------
Name: Xxxxxxxx Xxxxxxxx
Title: Vice President/ CFO
The Student Loan Corporation
By: /s/ Xxxxxxxxx Xxxxxxx
--------------------------------------------------
Name: Xxxxxxxxx Xxxxxxx
Title: Vice President
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.
EXHIBIT 10.2.1
7th Amendment Agreement
This Amendment Agreement is entered into as of May 20, 2004 among Citibank,
N.A., as Trustee for The Student Loan Corporation ("Bank"), The Student Loan
Corporation ("SLC") and Collegiate Funding Services, LLC ("CFS").
WHEREAS the Bank, SLC and CFS are parties to a certain Consolidation Loan
Responsibility Agreement dated as of November 15, 1999 (the "Agreement") which
provides for the marketing, servicing and funding of Consolidation Loans
pursuant to the provisions of the Federal Family Education Loan Program
("FFELP") through CFS' program generally known as the Real World Consolidation
Loan Program ("RWCLP"); and
WHEREAS the Agreement was amended by a 1st Amendment Agreement dated as of March
1, 2001 and executed March 7, 2001, by the 2nd Amendment Agreement dated as of
November 1, 2001 and executed November 19, 2001, by a 3rd Amendment Agreement
dated as of May 7, 2002 and executed July 25, 2002 by and between the parties;
by a 4th Amendment dated as of July 25, 2002; by a 5th Amendment dated as of
August 20, 2002 and executed November 12, 2002; and by a 6th Amendment dated as
of April 3, 2003 and executed April 10, 2003; and
WHEREAS the parties desire to further amend the Agreement for the mutual benefit
of the parties to permit CFS to offer any or all of the Borrower Incentive Plans
at any time as hereinafter set forth in greater detail; and
WHEREAS the parties desire to further amend the Agreement for the mutual benefit
of the parties to permit CFS to offer a supplemental pilot program under which
CFS will use the Citibank brand to market federal consolidation and
non-certified private loans.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by each party, the parties agree as
follows:
1. Section 7 of the Agreement is amended by changing the deductible on the
errors and omissions and liability policies from "$10,000" to "$100,000. CFS
acknowledges and agrees that CFS shall be responsible for payment of this
deductible in the event that CFS fails to perform any of its responsibilities
under the Agreement.
2. Section 9 of the Agreement is amended as follows:
A. The following sentence is added after the first sentence:
"Beginning June 1, 2004, the minimum Borrower Loan indebtedness must be
at least $[****]."
B. The following sentence is added after the last sentence of the Section:
"The Marketing Agent agrees to maintain an average Application amount
of $[****] each month which the Bank will review quarterly. Should the
quarterly average monthly Application amount (computed by adding the
average monthly Application amounts for each month in the quarter and
dividing by 3) remain below $[****] for [****] consecutive calendar
quarters, the Bank reserves the right to limit or cease funding after
giving CFS [****] days written notice of its intention to do so."
3. Section 11 is amended by deleting the present section and adding the
following in its place:
"11. Funding. The Bank agrees to fund [****] offered by CFS beginning May
20, 2004."
4. Section 13 is amended by adding two new paragraphs at the end of Section 13
to read:
"The Application fees listed below shall apply to all SCA's from the date
of the amendment until the end of the term of the agreement. The
Application fee for each of the Plans shall be: $[****] for Plan A,
$[****] for Plan B, and $[****] for Plan C; however, notwithstanding the
foregoing, (i) for any loans where the bank is the [****] with respect to
at least [****] being consolidated as part of a successfully completed
application, the parties agree that the Application fee paid for each of
the Plans shall be $[****] for Plan A, $[****] for Plan B $[****] for Plan
C; and (ii) if a loan is a consolidation of a [****] that CFS [****], that
includes an additional loan of the borrower that is added to the [****] to
constitute a new consolidation loan, then CFS shall receive an application
fee of $[****] for every successfully completed application under either
Plan A, B or C.
In addition to the foregoing, except as otherwise set forth in the last
two sentences of this paragraph, CFS agrees that it shall offer to Bank
all successfully completed applications that it obtains from any borrower
where the borrower has at least one underlying loan previously made by
Bank outstanding prior to the time of the execution by the borrower of the
CFS consolidation loan application. Bank acknowledges that CFS (1) has
committed to offer successfully completed applications for federal
consolidation loans where the borrower is a resident of Mississippi or
attends a school in Mississippi to the Mississippi Higher Education
Authority and (ii) has and may enter purchase agreements for federal
consolidation loan applications from unaffiliated third party(ies),and
Bank acknowledges that federal consolidation loan applications that CFS is
either committed as of the date hereof to offer and/or fund or purchase
from unaffiliated third parties under (i) and (ii) above, will not be
offered to Bank even if one of the underlying loans being consolidated was
previously made by Bank. For purposes herein the commitments referred to
in (i) and (ii) above shall be referred to as "Prior Commitments."
5. Section 14 entitled "Minimum Volume Commitment" is deleted in its entirety
and the following is substituted in lieu thereof:
CFS agrees to provide Bank and SLC an amount equal to at least $[****] in
completed federal consolidation loan applications in calendar year 2004.
Beginning January 1, 2005, CFS shall offer to Bank [****]% of its successfully
completed applications that are not subject to Prior Commitments. CFS further
agrees that it will not permit the [****] of all [****] to exceed [****]% of all
successfully completed applications for federal consolidation loans [****] or
[****] by CFS.
6. Section 24 is deleted and the following inserted in its place:
"The parties agree that the terms and provisions of this Amendment,
including but not limited to the new fees set forth in Section 13, shall
be effective as of May 20, 2004, the date of this Amendment. In addition,
the parties hereto agree that the terms and provisions of the Agreement
shall remain in full force and effect through December 31, 2007. The
Agreement shall renew automatically for additional one year terms unless
one of the parties notifies the others in writing of their intent not to
renew at least 90 days prior to the expiration of the initial or any
renewal term."
7. A new section is added:
1. Program.
The Citibank Program ("Program") is a pilot test program which will be
conducted for 180 calendar days from the start date ("Test Phase") and
affords CFS the opportunity to market federal consolidation loans and
market, originate and process non-certified private loans to selected
non-SLC customers using the Citibank brand. CFS agrees that any federal
consolidation loans marketed by CFS using the Citibank brand shall be
sourced to Citibank, but shall not be included in calculating the volume
commitments being made by CFS to Citibank under Section 14 herein. In
addition, such federal consolidation loans shall not be considered a
"Prior Commitment" for purposes herein.
2. Test Phase
The Test Phase will consist of a 180 calendar day period from a date that
will be mutually agreed upon by the parties during which CFS will send out
Program marketing materials by direct mail and/or the internet, to non-SLC
customers regarding the Programs for federal consolidation and
non-certified private loans. A detailed description of the non-certified
private loan is described on Exhibit A hereto. CFS shall review Program
arrangements with SLC in detail prior to the beginning of the Test Phase.
Following CFS' obtaining approval from SLC to move forward with a
particular offer relating to the federal consolidation and/or
non-certified Programs, the Citibank brand will be included in the text of
each Program mail piece or internet offering. SLC and Bank shall review
and approve all Program marketing and promotional pieces before use by CFS
within 3 business days of submission by CFS. CFS shall perform all
marketing, origination and processing relating to the Programs in
conformity with the other terms of this Agreement and the terms of all
Program contracts. In addition to the foregoing, CFS and Bank agree
that, prior to the mailing of any promotional pieces, CFS and Bank will
"scrub" all customer lists used by CFS in connection with offers relating
to the Program against an opt-out list provided by Bank and/or SLC in
order to comply with federal Gramm Xxxxx Xxxxxx laws and regulations.
CFS hereby indemnifies SLC and Bank from any and all loss, cost, damage or
expenses (including penalties, interest, reasonable expenses of
investigation and attorneys' fees) incurred or arising out of (i) any
failure by CFS to comply with any of its obligations with respect to the
Citibank branded Program and any Program contract entered into by CFS,
with any third parties, (ii) any failure by CFS to comply with any
applicable federal, state or local laws relating to the Citibank branded
Program that is part of the Test Phase; (iii) the use by CFS of the
Citibank brand on marketing materials relating to the Program that is not
approved by Bank or SLC; or (iv) any negligence or willful misconduct of
CFS with respect to the marketing, origination and processing of loans
under the Citibank branded Program.
3. Fees
During the Test Phase, for any non-certified private loan made
under the Program, CFS will pay SLC or Bank [****] ([****]%) percent of
the principal amount of each funded non-certified private loan, including
any serial loan. On federal consolidation loan applications, SLC or Bank
shall pay CFS the fees provided in this Agreement. CFS expressly
acknowledges that it is committed to compensating SLC and Bank for any
non-certified private serial loan sourced through the Program where the
borrower obtained a prior Citibank branded loan through the Program. CFS
shall pay the non-certified private loan fees no later than 30 days
following receipt by CFS of compensation payable to CFS under the Program.
4. Successful Program
After the Test Phase is completed, the parties shall determine whether to
continue all or part of the Program and the terms under which it shall
continue. Any applications that have been submitted as of the end of the
Test Phase shall continue to be processed, and the parties shall be
responsible for the payment of any fees relating thereto."
This 7th Amendment Agreement may be executed in counterparts, each of which may
be a fax copy of an original but all of which, when taken together, shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have set their hands as of the first day
written above.
Collegiate Funding Services, LLC
/s/ J. Xxxxx Xxxxxx
--------------------------------------------------
J. Xxxxx Xxxxxx
Chief Executive Officer
The Student Loan Corporation
By: /s/ Xxxxxxx Xxxxxxxx
--------------------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
Citibank, N.A., as Trustee for The Student Loan Corporation
By: /s/ Xxxx X. Xxxxxxxx
--------------------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President
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.
EXHIBIT A
NON CERTIFIED PRIVATE LOAN PROGRAM DESCRIPTION
Operating Model:
- CFS is Marketer
- Charter One is Initial interim lender
- FMC Originates
- PHEAA is Servicer
- FMC acquires the loan from Charter One via Securitization
Undergraduate and Graduate
TIER RATE XXXX. FEE
----------------------------------------------------------------------
Tier 1 Co-borrower [****]> or = [****] + [****]%[****]%
Student [****]> or = [****]
----------------------------------------------------------------------
1. Tier 2 Student [****] > or = [****] + [****]%[****]%
[****]
----------------------------------------------------------------------
Tier 3 Co-borrower [****] > or = [****] + [****]%[****]%
Student [****] [****]
----------------------------------------------------------------------
Tier 4 Co-borrower [****] > or = [****] + [****]%[****]%
[****]
Student Below [****]
----------------------------------------------------------------------
Tier 5 Co-borrower [****]- [****] + [****]%[****]%
[****] [****]
Student with any or no
FICO
* 2nd Xxxx. Fee is for total deferment. Graduate and CEL are automatically
deferred.
Continuing Education
TIER RATE XXXX. FEE
--------------------------------------------------------------
Tier 1 Co-borrower [****]> or = [****] + [****]%
Student [****] > or = [****]
------------------------------------------------------------
2. Tier 2 Student [****]> or = [****] + [****]%
[****]
------------------------------------------------------------
Tier 3 Co-borrower [****]> or = [****] + [****]%
Student [****] [****]
------------------------------------------------------------
3. Tier 4 Co-borrower [****] + [****]%
[****]> or = [****]
Student Below [****]
------------------------------------------------------------
4. Tier 5 Co-borrower [****]- [****] + [****]%
[****] [****]
Student with any or no
FICO
Minimum Annual Loan Amount: $[****]
Maximum Annual Loan Amount: $[****]
Aggregate Maximum: $[****]
Minimum Payment: $[****]
Deferment Options:
Undergraduate Loans - Immediate Repay
Defer Interest Only
Total Deferment
Graduate and Career Education Loan - Total Deferment Only
Repayment:
- $1,500 - $39,999 (Up to 20 years)
- $40,000 + (Up to 25 years)
Discount:
..25% discount for ACH
