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EXHIBIT 10.7
GEORGIA HIGHER EDUCATION ASSISTANCE CORPORATION
LOAN HOLDER AGREEMENT
FOR LOANS GUARANTEED BY THE CORPORATION
This agreement is executed this 1st day of June, 1998 by and between the
Georgia Higher Education Assistance Corporation (GHEAC) a public non-profit
Corporation, and Star Bank, N.A. as Trustee for Student Loan Funding (the
Holder).
Witnesseth:
WHEREAS, GHEAC has entered into certain agreements with the U.S. Secretary of
Education to serve as a guaranty agency, and;
WHEREAS, GHEAC has guaranteed for an eligible originator, the Federal ▇▇▇▇▇▇▇▇
Subsidized (Sub) loan(s), Federal ▇▇▇▇▇▇▇▇ Unsubsidized (Unsub) loan(s),
Federal Supplemental Loan for Students (SLS) loans(s), Federal Parent Loan to
Undergraduate Students(PLUS) loans(s), or the Federal Consolidation Loan(s)
which have been acquired by the Holder; and
WHEREAS, GHEAC wishes to remain the guarantor of a loan(s) previously guaranteed
by GHEAC upon the transfer from the originator to any subsequent eligible loan
holder; and
WHEREAS, GHEAC is obligated to honor the guarantee issued upon a loan(s)
presently held by the Holder, provided the insurance coverage and guarantee has
not been invalidated; and
WHEREAS, the Holder qualifies as eligible to receive reimbursement for claims
on loans upon which GHEAC has issued a loan guarantee; and
WHEREAS, the Holder is the owner of all right, title and interest in and to the
eligible loan(s), and the eligible loan(s) are subject to no prior assignment
or other lien or encumbrance; and
WHEREAS, the Holder has not lost eligibility for reimbursement on the loan(s)
upon which a claim is filed for reimbursement;
NOW THEREFORE, in consideration of mutual covenants herein contained, and of
other valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. This Agreement is subject to and incorporates by reference the current
provisions of and any subsequent amendments to Title IV, Part B, of the Higher
Education Act of 1965, as amended (20 U.S.C. 1071 et. seq.); Title 34 Code of
Federal Regulations Part 668, Part 682, et. seq.; the Official Code of Georgia
Annotated, 20-3-260 et. seq.; the GHEAC Policies and Procedures Manual; and the
COMMON MANUAL, Unified Student Loan Policy. Nothing in this Agreement is
intended to abrogate, modify, or limit the applicability of the above
citations. The terms and conditions set forth in this Agreement shall be
subject to automatic modification and revision from time to time by the
amendment of the above citations.
2. This agreement is entered into for the purpose of confirming an intent for
GHEAC to remain as the guarantor of a loan(s) where a GHEAC guarantee has been
issued, upon the Holder acquiring right, title and interest in the eligible
loan(s) from a prior eligible holder of the loan(s).
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Georgia Higher Education Assistance Corporation (GHEAC)
Guaranty Agency Loan Holder Agreement
3. GHEAC promises to reimburse the Holder in an amount not to exceed one
hundred percent (100%) of any proven loss incurred by the Holder due to the
default, death, permanent and total disability, or bankruptcy of the borrower
of any loan held by the eligible holder and guaranteed by GHEAC. Where the
maximum allowable reimbursement percentage is otherwise defined, or reduced by
statute or regulation, that reimbursement percentage shall prevail. If the
guarantor's reinsurance coverage is reduced as provided for by the Secretary,
the reimbursement to the Holder shall be that percentage allowed under the
provision.
4. GHEAC shall apply the standard compliance review on all claims submitted for
reimbursement by GHEAC. Due diligence violations existing prior to the date of
acquisition by the Holder shall not be waived in review of claims filed by the
Holder.
5. Compliance by the Holder with the terms and conditions of this Agreement,
compliance with the terms and conditions pursuant to regulation, and compliance
with Holder's or prior eligible holder's obligations contained in that certain
Single Source Partners Lender Participation Agreement or any other Participation
Agreement between GHEAC and Holder, or Holder's prior originator, or prior
eligible loan holder, shall be a condition of GHEAC's obligation to reimburse
the Holder for loss as noted in section 3. of this Agreement. The Holder will be
responsible for all program requirements.
6. The Holder warrants that all assurances and representations made by the
Holder regarding any transactions made under this Agreement are complete and
accurate statements. Any representations made by the Holder, unless amended,
shall be binding on the Holder for the duration of the period of guarantee
coverage.
7. Any amendments or revisions to the law or regulations applicable to this
section shall be effectuated and considered as part of this Agreement, as
appropriate.
8. The Holder shall permit GHEAC, under its supervision and examination
authority, to examine during normal business hours, any educational records and
files, upon reasonable notice and at reasonable intervals, for the purpose of
conducting a program review.
9. This Agreement may be terminated by the Holder, GHEAC or the Secretary of
Education at any time, however, termination of this Agreement by either party
shall not affect the rights and obligations of the respective parties incurred
or accrued prior to the effective date of the termination unless the parties
shall expressly otherwise agree in writing.
10. Any notice given or required to be given by this Agreement shall be deemed
to have been properly given when deposited in the United States mail, the
postage has been prepaid, the mail has been certified, a return receipt has been
requested, and delivery has been attempted to the other party at the address
designated below, or at such other address as the parties may designate
periodically.
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Georgia Higher Education Assistance Corporation (GHEAC)
Guaranty Agency Loan Holder Agreement
IN WITNESS WHEREOF, the parties have caused this instrument to be executed by
their respective duly authorized officers, as of the day and date first written
above.
Star Bank, N.A. as Trustee for Georgia Higher Education Assistance
Student Loan Funding Corporation
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Name of Lending Institution ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ML 5125 /s/ E. ▇▇▇▇▇ ▇▇▇▇▇▇▇ 4/29/98
▇.▇. ▇▇▇ ▇▇▇▇ ------------------------------------
-------------------------------------- E. ▇▇▇▇▇ ▇▇▇▇▇▇▇, Executive Director
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▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
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City/State Zip
▇▇-▇▇▇▇▇▇▇
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Federal Tax Identification Number
829626
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Federal Code Number
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Senior Trust Officer
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Name/Title of Authorized Officer
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (SEAL)
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Signature of Authorized Officer
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