Exhibit 10.12
MISSOURI COORDINATING BOARD
Agreement to FOR HIGHER EDUCATION
Guarantee Federal Missouri Student Loan Program
Xxxxxxxx Loans X.X. Xxx 0000
(Subsidized and Unsubsidized) XXXXXXXXX XXXX, XXXXXXXX 00000
Federal PLUS Loans (000) 000-0000
Federal SLS Loans (000) 000-0000
THIS AGREEMENT, entered into between the Missouri Coordinating Board for Higher
Education (hereinafter referred to as the "CBHE") and
First Bank National Association as Trustee for Education Loans Incorporated,
Minneapolis, MN
(hereinafter referred to as the "Lender"), (City and State)
WITNESSETH:
WHEREAS, the CBHE is an Agency of the State of Missouri whose objectives
are to provide opportunities for a postsecondary education and has entered into
an agreement with the U.S. Secretary of Education pursuant to Section 428 and
42RB of the Higher Education Act of 1965 ("Act");
WHEREAS, the CBHE maintains a central office for the guarantee of loans
made by participating lenders to students or parents c students attending
eligible educational institutions;
WHEREAS, the Lender is desirous of participating in the Federal Xxxxxxxx
Loan Program (subsidized and unsubsidized) and the Federal PLUS Loan Program of
the CBHE subject to the terms and conditions hereinafter set forth; and
WHEREAS, the Lender is desirous of participating in the Federal SLS Loan
Program, it being understood that the Federal SLS Loan Program was terminated
pursuant to federal law effective July 1, 1994; therefore, Lender's
participation with relation to the Federal SLS loans shall be limited to loans
guaranteed before July 1, 1994 for periods of enrollment starting before July 1,
1994; and
WHEREAS, the CBHE references to the Federal Xxxxxxxx Loan Program include
subsidized and unsubsidized loans, Federal PLUS loans, and Federal SLS loans as
described above.
NOW, THEREFORE, in consideration of the initial loan which the Lender makes
hereunder, and in further consideration of the mutual covenants hereinafter
expressed, the CBHE and the Lender agree as follows:
1. As used herein, the following words shall have the meanings
respectively indicated:
Act: the Higher Education Act of 1965 (Public Law 89-329), as amended
and in effect from time to time, or any successor enactment thereto, and the
rules and regulations as amended in effect from time to time hereunder.
Approved Note: any United States Department of Education approved
application and promissory note or addendum to the application and promissory
note to be executed by an eligible student, an eligible parent, an eligible
educational institution and the Lender.
Default: with respect to an Approved Note, the occurrence of any event
which shall constitute a default under the terms of such Note.
Eligible Borrower: an eligible student, parent of an eligible student,
or legally appointed guardian or conservator of an eligible student who is the
maker of an Approved Note.
Eligible Educational Institution: any institution of postsecondary
education which is an "eligible institution" under the Act and is eligible under
the CBHE's Missouri Student Loan Program Manual.
Missouri Student Loan Program Manual: the manual and all memos,
newsletters and other policy updates describing how the loan program is
administered, and also including the Common Manual: Unified Student Loan Policy.
Notice of Loan Guarantee and Disclosure Statement: a document
evidencing approval of loan disbursement by the CBHE stating the particular
terms of the loan.
Request for Claim Payment: a document requesting payment from the CBHE
for a claim when an Approved Note is in default.
Student: a citizen of the United States accepted for enrollment or
enrolled at an eligible educational institution or an alien admitted into the
United States for permanent residence and accepted for enrollment or enrolled at
an eligible educational institution located in the United States who is in good
standing and making satisfactory progress at an eligible educational institution
and who is carrying at least one-half the normal full-time academic workload as
determined by such institution.
All documents and instruments referred to in this paragraph 1 shall be
in the current form as furnished from time to time approved for use by the CBHE.
2. Nothing contained in this Agreement shall obligate the Lender to make
any particular loan or number of loans under loan programs of the CBHE; but the
Lender agrees that it will refinance or extend the maturity of each Approved
Note held by it from time to time, in accordance with the terms of such Approved
Note and this Agreement, or as required by federal statute or regulation.
3. The Lender agrees that, in respect of all loans made by it under a loan
program of the CBHE and all Approved Notes held by from time to time, it will:
(a) exercise reasonable care and diligence in the making, servicing
and collection thereof from the borrower, in the event that the borrower fails
to honor his/her obligation, the Lender will pursue collection efforts against
endorser(s), if any, prior to submitting a default claim.
(b) comply with all procedures and conditions on its part to be
performed as set forth in this agreement and the CBHE policies.
(c) comply with all Federal and State laws and regulations applicable
thereto, including the Federal Consumer Credit Protection Act and regulations
thereunder, and
(d) provide promptly to the CBHE such information and reports as may
from time to time be reasonably requested by the CBHE.
4. Upon payment to the CBHE of any required guarantee fee, the CBHE will
guarantee each Federal Xxxxxxxx Loan, Federal PLUS, or Federal SLS Loan
Application and Promissory Note
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evidencing a loan made to a borrower by the Lender pursuant to the loan program
of the CBHE; provided, however, that the CBHE shall not be obligated to
guarantee any such Note if:
(a) such guarantee would cause the aggregate amount of unpaid
principal and interest of all notes guaranteed by the CBHE to exceed the maximum
dollar amount which may then be supported by its Guarantee Reserve Fund, as
required under paragraph 7 hereof; or
(b) such guarantee would cause the aggregate amount of unpaid
principal and interest of all notes guaranteed by the CBHE exceed the loan
capacity of the CBHE's applicable loan program; or
(c) the CBHE in its sole discretion determines that the procedures and
requirements of applicable law and regulations, this Agreement and the Missouri
Student Loan Program Manual have not been complied with in respect to such
Federal Xxxxxxxx Loan, Federal PLUS, or Federal SLS Loan Application and
Promissory Note.
The CBHE shall promptly notify the Lender if, for any of the above-
stated reasons, it is unable to guarantee a loan, and the C] shall return any
guarantee fee for such loan paid by the Lender.
5. The CBHE will guarantee each Repayment Schedule evidencing the
refinancing of a Promissory Note which has been guaranteed by the CBHE or
guarantee each extension of the maturity date of an Approved Note; provided,
however, that the CBHE shall not be obligated to guarantee any such Note or
extension if the CBHE in its sole discretion determines that the refinancing or
extension, as the case may be, is not in accordance with the terms of the
underlying Approved Note or the procedures and requirements of applicable law
and regulations, this Agreement and the Missouri Student Loan Program Manual.
6. (a) In the event of a delinquency or a default in respect to any
Approved Note, the Lender shall follow the procedure set forth in the Missouri
Student Loan Program Manual. The CBHE does not guarantee payment by the
borrower of any delinquency charges imposed for late payments, and will not
accept a default claim based solely on non-payment of such charges. Upon
receipt from the Lender of a Request for Claim Payment together with the Note
(assigned to the CBHE), the Federal Xxxxxxxx Loan, Federal SLS Loan, or Federal
PLUS Loan Application and Promissory Note, and evidence of collection effort
satisfactory to the CBHE, the CBHE will pay to the Lender the amount of the
unpaid balance of principal and interest allowed by federal regulations due on
such Note (other than any portion of such interest payable by the U.S.
Department of Education under the Act), provided the Lender has complied in all
material respects with the procedures and requirements of the Act and all other
applicable laws and regulations, this Agreement and the Missouri Student Loan
Program Manual in respect of such Note. The CBHE shall thereupon succeed to all
the rights of the Lender under such Note.
(b) The liability of the CBHE as guarantor of any Approved Note in
accordance herewith shall not be affected by the fact that the borrower was a
minor at the time of his/her execution of the Note. Upon death or permanent and
total disability of the borrower, the borrower's liability will be cancelled
provided the loan is reinsurable in an amount provided by federal regulations.
7. The CBHE covenants that it will at all times, so long as the Lender is
the holder of an Approved Note, hold and maintain, in an amount required by law,
a Guarantee Reserve Fund, pursuant to an agreement between the CBHE and the U.S.
Secretary of Education. Such cash and marketable securities shall be held,
maintained and invested solely in accordance with the prevailing standard of
prudent management in the disposition of funds required by the Treasury of the
State of Missouri.
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8. (a) No change, other than the extension of the maturity date of a
Promissory Note pursuant to paragraph 5 of this Agreement, shall be made in the
terms of any Approved Note, except with the prior written consent of the CBHE.
Any such change made without such consent shall have the effect, at the option
of the CBHE, of voiding the CBHE's guarantee of such Approved Note.
(b) If either party to this Agreement shall violate or fail to comply
with any applicable law or governmental regulation in respect of any Approved
Note, then the party committing such violation or failure to comply shall assume
liability for, and shall indemnify, protect and keep harmless the other party,
its successors, assigns, directors, officers, agents and servants, from and
against, any and all liabilities, losses, damages, penalties, claims, actions,
expenses and disbursements, including legal fees and expenses, imposed on,
incurred by or asserted against them or any of them, in any action or proceeding
relating to or arising out of such violation or failure to comply, regardless of
whether the CBHE shall have purchased such Approved Note from the Lender.
9. The Lender must at all times maintain its CBHE loan program records on
a current basis and in a satisfactory form in accordance with such instructions
as the CBHE may issue and as the U.S. Secretary of Education may reasonably
require, and shall afford access thereto at any reasonable time to the CBHE or
its agents and to the Secretary to assure the correctness and veracity of such
records.
10. No recourse under or upon this Agreement or any Approved Note or
guarantee thereof, or for any claim based thereon or otherwise in respect
thereof, shall be had against any commissioner, member, officer, trustee,
director, agent or employee, as such, past, present or future, of either party
to this Agreement, it being expressly understood that this Agreement, the
Approved Notes and guarantees thereof, are solely the obligations of Lender and
the CBHE, and that no personal liability whatever shall attach to, or is or
shall be incurred by, the commissioners, members, officers, trustees, directors,
agents or employees, as such, of Lender or the CBHE or of any successor agency,
or any of them, because of this Agreement or any Approved Note or guarantee
thereof.
11. Any notice required or permitted by this agreement shall be in writing
and shall be deemed to have been duly given if mailed, first class postage
prepaid, addressed (i) if to the Missouri Coordinating Board for Higher
Education at X.X. Xxx 0000, Xxxxxxxxx Xxxx, XX 00000, (ii) if to the Lender, at
the address indicated below, or (iii) at such other address of which the party
to be notified shall have given notice as aforesaid.
12. This Agreement may be terminated by either party upon not less than 60
days prior written notice to the other party. Such termination shall not affect
any obligation incurred pursuant to this Agreement prior to the time that such
termination notice becomes effective.
13. This Agreement shall inure to the benefit of and be binding upon the
CBHE and the Lender and their respective successors and assigns. This Agreement
shall not be varied by oral agreement, but only by an instrument in writing duly
executed by the parties hereto. Any waiver or modification, express or implied,
by the CBHE of any term or condition contained in this Agreement shall operate
as such only in the specific instance and shall not be constructed as a waiver
or modification of any such condition generally or in any other instance.
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IN WITNESS WHEREOF, the Missouri Coordinating Board for Higher Education
and the Lender have each caused his instrument to be executed the 15 day of
July, 1997, by their respective duly authorized officers.
MISSOURI COORDINATING BOARD FOR
HIGHER EDUCATION
First Bank National Association as Trustee
for Education Loans Incorporated /s/ Xxxx X. Xxxxxx
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LENDER SIGNATURE OF AUTHORIZED OFFICIAL
By By Xxxx X. Xxxxxx, Commissioner
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SIGNATURE NAME AND TITLE
Sr. Vice President July 17, 1997
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TITLE DATE
000 Xxxxxx Xxxxxx Xxxxx
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STREET ADDRESS
Minneapolis, Minnesota
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CITY AND STATE
833405
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FEDERAL LENDER CODE
00-0000000
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ENTITY NUMBER
RETURN TWO SIGNED COPIES TO MISSOURI COORDINATING BOARD FOR HIGHER EDUCATION
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