Exhibit 10.5
PENNSYLVANIA HIGHER EDUCATION LENDER AGREEMENT
ASSISTANCE AGENCY FOR GUARANTEE OF STUDENT LOANS
NATIONAL GUARANTY AGREEMENT WITH FEDERAL REINSURANCE
(for loans to students and parents of
students pursuant to the Higher education
Act of 1965, as amended)
WHEREAS FIRST BANK NATIONAL ASSOCIATION
----------------------------------------------------------
(Corporate Name)
Located at ▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
-----------------------------------------------------------
(City) (State) (Zip)
hereinafter referred to as the "Lender," wishes to be able 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 Pennsylvania Higher Education Assistance Agency, hereinafter
referred to as the "Agency", was created by the Act of August 7, 1963, P. L. 549
for the purpose of improving higher educational opportunities and to that end
the Agency is empowered to guarantee loans; and
WHEREAS, the Agency, having found that the Lender qualifies as an eligible
lender under the provisions of the Act, the regulations issued under the Act and
the Rules and regulations and policies of the Agency, wishes to encourage the
making of such loans by the Lender; and
WHEREAS, the Agency has contracted with Education Assistance Corporation,
hereinafter referred to as "EAC", to perform certain guarantor functions on
behalf of the Agency.
NOW THEREFORE, it is mutually agreed that:
1. Within such limits as may be set by it, the Agency shall guarantee the full
amount of all loans made by the Lender which are eligible for such
guarantee under the Act, the regulations issued under the Act and the Rules
and Regulations and policies of EAC as amended by Attachment I and
administered by EAC pursuant to an Agreement between EAC and PHEAA, which
Act, regulations, Rules and regulations and policies as they may be from
time to time amended are made part of this Agreement.
2. The Agency agrees to purchase eligible loans made by the Lender provided
that such loans are in default (as defined by the Act, regulations, Rules
and Regulations and policies identified above); the Lender has made the
loan in accordance with the Act, regulations, Rules and Regulations and
policies identified above; the Lender has otherwise exercised due diligence
in the making, servicing, and collection of such loans; and, title to the
loan note has been subrogated to the Agency by the Lender.
3. On all loans guaranteed, the Agency agrees to obtain maximum reinsurance by
means of an agreement with the Federal Government pursuant to the Act.
4. The Lender agrees to collect the guarantee fee, if any, prescribed by the
Agency from the borrower and to remit such fee in the manner designated by
the Agency.
5. The Lender hereby consents to the assignment by Agency of its obligation to
guaranty repayment of a loan made hereunder to EAC.
6
6. In making loans under the Act, the Lender will undertake to secure such
reductions in borrowers' obligations to pay interest on loans made by the
Lender as they may be eligible to receive under the Act and regulations.
The Lender further agrees to comply with all applicable Federal and State
laws.
7. The 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 the Agency, under the Act, regulations, Rules and Regulations
and policies identified above. For loans paid in full or otherwise
discharged the records shall be retained by the Lender as required by the
Act, regulations, Rules and Regulations, and policies identified above.
8. The Agency shall guarantee loans without regard to sex, age, race, color,
religion, handicapped status, income, national origin or any other basis
prohibited by applicable law and the Lender will not discriminate in the
making of loans to eligible borrowers or in the treatment of such borrowers
on any prohibited basis.
9. This Agreement may be terminated by the Agency in the manner provided for
by the Agency's Rules and Regulations or by the Lender upon 30 days written
notice to the Agency. The Agency may suspend or limit this Agreement in the
manner provided for by the Agency's Rules and Regulations. Termination,
limitation or suspension of this Agreement shall not affect the coverage of
loans previously guaranteed.
IN WITNESS WHEREOF, the Lender and the Agency have caused this Agreement to be
duly executed and delivered this 28th day of February, 1994.
FIRST BANK NATIONAL ASSOCIATION PENNSYLVANIA HIGHER EDUCATION
Lender Name ASSISTANCE AGENCY
/s/ /s/ ▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------- ------------------------------
Authorized Signature President and CEO
830694
----------------------------------------
Credit Bureau Lender Identification Code
(To be completed by EAC)
7
