Exhibit 10.4
EAC
LENDER AGREEMENT
LENDER AGREEMENT FOR GUARANTEE OF
STUDENT LOANS WITH FEDERAL REINSURANCE
(for loans to students and parents of students pursuant
to Part B of the Higher Education Act of 1965, as amended)
Whereas, First Bank National Association
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(Lender Name)
Located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
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(Street Address)
▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
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(City) (State) (Zip)
hereinafter referred to as the "Lender", wishes to secure guarantee of loans
made to students pursuing programs of higher or vocational education at eligible
institutions, and to parents of such students pursuant to the aforementioned
federal legislation, hereinafter referred to as the "Act"; and
WHEREAS, the Education Assistance Corporation, a South Dakota corporation,
hereinafter referred to as "EAC", was created pursuant to the laws of the State
of South Dakota and the Higher Education Act of 1965, as amended; and
WHEREAS, EAC has entered into contracts with the United States Department of
Education pursuant to the Higher Education Act of 1965, as amended, which
contracts provide for the reinsurance of amounts paid to Lenders for eligible
loans pursuant to such statutes and the regulations issued by the Department of
Education pursuant thereto; and
WHEREAS, Lender wishes to participate in EAC's guarantee program;
NOW, THEREFORE, it is mutually agreed that:
1. This agreement is subject to and incorporates by reference the current
provisions of, and subsequent amendments to, the applicable portions of the
Act, the regulations issued by the United States Department of Education
pursuant thereto, and the rules and regulations of EAC.
2. Within limits as may be set by EAC or the United States Department of
Education, EAC shall guarantee the full amount of all loans made by Lender
which are eligible for such guarantee under the Act.
3. On all loans guaranteed, EAC agrees to obtain maximum reinsurance by means
of an agreement with the Federal Government pursuant to the Act.
4. EAC agrees to purchase eligible loans made by the Lender provided that such
loans are in default (as defined by the Act, regulations, and policies and
procedures of EAC); the loan was made in accordance with the Act,
regulations, and policies and procedures of EAC; the Lender has otherwise
exercised due diligence in making, servicing, and collection of such loans;
and, title to the loan note has been subrogated to EAC by the Lender.
5. Lender agrees to collect the guarantee fee as shall from time to time be
prescribed by EAC from the borrower and remit such guarantee fee in the
manner designated by EAC.
6. Lender agrees that EAC may assign its obligation to guarantee repayment of
a loan made hereunder to another guarantee agency which holds a 428(b)
Agreement with the Secretary of the Department of Education.
7. In making loans under the Act, Lender will undertake to secure such
reductions in borrowers' obligations to pay interest on loans made by
Lender as they may be eligible to receive under the Act and regulations.
Lender further agrees to comply with all applicable Federal and State laws.
8. Lender shall maintain for all loans guaranteed a system of records and
accounts, shall afford access thereto, and shall furnish such periodic and
separate reports as may reasonably be required by the U.S. Secretary of
Education and EAC, under the Act, regulations, and policies and procedures
of EAC. For loans paid in full or otherwise discharged, the records shall
be retained by Lender as required by the Act and policies and procedures of
EAC.
9. EAC shall guarantee loans without regard to sex, age, race, religion,
handicapped status, income, marital status, national origin or any other
basis prohibited by applicable law and Lender will not discriminate in tile
making of loans to eligible borrowers or in the treatment of such borrowers
on any prohibited basis.
10. This agreement may be terminated by EAC in the manner provided for by EAC's
policies and procedures or by Lender upon 90 days' written notice to EAC.
EAC may suspend or limit this agreement in the manner provided for by EAC's
policies and procedures. Termination, limitation or suspension of this
agreement shall not affect tile coverage of loans previously guaranteed.
11. In no event shall Lender transfer, delegate, pledge or assign this
agreement or any rights thereunder, nor shall Lender transfer, delegate,
pledge or assign a promissory note (or any rights or responsibilities
thereunder) insured pursuant to this agreement to anyone or entity other
than an eligible lender under EAC's guarantee program without the prior
written consent of EAC. Any such assignee, transferee, delegatee or
subsequent holder of such promissory note insured pursuant to this
agreement shall take subject to the terms and conditions as set forth in
this agreement.
12. Lender shall, upon reasonable request by EAC, the United States Department
of Education or their duly designated representatives, make available all
books, records, and documentation necessary to ensure compliance with this
agreement and any applicable law.
13. Upon filing of a default claim with EAC, Lender shall assign to EAC all of
its right, title and interest in the promissory note or notes that are the
subject of such default claim, and EAC shall be deemed fully subrogated to
the rights and responsibilities of Lender pursuant to such note.
14. No modification of the terms and conditions of this agreement shall be
effective unless evidenced by a written agreement signed by both parties
hereto.
15. This agreement shall be governed and construed according to the laws of the
State of South Dakota.
16. Should any provision of this agreement be found to be inapplicable or
otherwise unenforceable and not binding upon the parties hereto, it is the
intention of the parties that the remainder of this agreement shall remain
in full force and effect upon the respective rights and obligations of the
parties hereto.
IN WITNESS WHEREOF, Lender and EAC have caused this agreement to be duly
executed and delivered this 3rd day of July, 1997.
EAC: LENDER:
EDUCATION ASSISTANCE CORPORATION Name: First Bank National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
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By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇ By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Its President Its Senior Vice President
ED Lender Code: 833405
Form 1-0895 6/97
Certificate of Comprehensive Insurance
(for Federal Consolidation Loans made in accordance with
Title IV, Part B of the Higher Education Act of 1965, as amended)
Education Assistance Corporation, herein referred to as the "Agency" authorizes
that all Federal Consolidation Loans made in conformity with the requirements of
Part B of Title IV of the Higher Education Act of 1965, as amended, by U.S. Bank
National Association as Trustee for Education Loans Incorporated, herein
referred to as the "Lender", are guaranteed to the maximum reinsurance provided
pursuant to the Act against loss of principal and interest by the Agency
provided:
1. The Lender has determined to its satisfaction, in accordance with
reasonable and prudent business practices, for each loan being
consolidated--
(a) that the loan is a legal, valid, and binding obligation of the
borrower;
(b) that each such loan was made and serviced in compliance with applicable
laws and regulations; and
(c) that the insurance on such loans is in full force and effect.
2. That the Federal Consolidation Loan(s) will be made on or after October 1,
1996. The expiration date of this Certificate is at the end of the day,
September 30, 1998.
3. That the total unpaid principal amount of all Federal Consolidation Loans
made under this Certificate is equal to or less than $30,000,000.
4. That, if the Lender prior to the expiration of this certificate no longer
proposes to make Federal Consolidation Loans, the Lender will so notify the
Agency in order that the Certificate may be terminated. Such termination
shall not affect the insurance on any Federal Consolidation Loan made prior
to such termination.
5. That the Lender's Federal Loan Consolidation Program practices are subject
to the Higher Education Act of 1965, the U.S. Department of Education
regulations and Education Assistance Corporation's regulations, policies
and procedures, including the Federal Family Education Loan Program Lender
Participation Limitation, Suspension or Termination procedures, as amended
from time to time.
6. That the Lender complies with reporting requirements, as specified from
time to time by the Office of the Department of Education.
7. That the alternative repayment terms offered to borrowers are fixed,
graduated, and income sensitive repayment options.
8. That Education Assistance Corporation's office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ is designated as the office which will process
claims and perform other related administrative functions.
In witness whereof, Lender and EAC have caused this agreement to be duly
executed and delivered this 12th day of September, 1997.
EAC: Lender:
Education Assistance Corporation U.S. Bank National Association as
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ Trustee for Education Loans Incorporated
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇
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By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇ By: /s/ ▇▇▇▇ ▇. Daindorf
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Its President Its Senior Vice President
