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Exhibit 10.6
LENDER AGREEMENT FOR GUARANTEE OF
STUDENT LOANS WITH FEDERAL REINSURANCE
(SECONDARY MARKET LENDER)
For loans eligible for guarantee under the Higher Education Act of
1965, as amended (the "Act").
WHEREAS, The First National Bank of Chicago, not in its individual
capacity but solely as Eligible Lender Trustee on behalf of the KeyCorp Student
Loan Trust 1999-A (the "Trust"), pursuant to the Trust Agreement dated as of
July 13, 1998, between Key Bank USA, National Association and the Eligible
Lender Trustee, as the same may be amended, including by way of amendment and
restatement, from time to time (the "Trust Agreement") located at, One First
National Plaza, Suite 0126, Chicago, Illinois 60670, Attn: Corporate Trust
Administration, using DE Lender ID number 833220 (the "Lender") wishes to secure
loan guarantees with the Nebraska Student Loan Program, Inc. ("NSLP") on federal
student loans made to "Eligible Borrowers" (as hereinafter defined) purchased by
Lender from eligible institutions pursuant to the Act; and
WHEREAS, Lender represents that it is an eligible secondary market
lender under the provisions of the Act and the "Program Rules" (as hereinafter
defined).
NOW, THEREFORE, it is mutually agreed that:
1. The following words and terms shall have the following meanings
unless otherwise herein provided or unless the context or use
clearly indicates another or differing meaning or intent:
(a) "Act" shall mean Title IV, Part B, of the Higher Education
Act of 1965, as amended, the regulations promulgated
thereunder, and all official interpretations of federal
requirements as issued by the U.S. Department of Education
("ED");
(b) "Agreement" shall mean this Agreement;
(c) "Eligible Borrower" shall mean a borrower as defined by the
Act;
(d) "Eligible Loan" shall mean a loan as defined by the Act;
and
(e) "Program Rules" shall include, but are not limited to, the
Act, the Common Manual -Unified Student Loan Policy, NSLP
Operations Alerts and NSLP correspondent materials. All
such Program Rules, as amended from time to time, are
specifically incorporated into and made a part of this
Agreement.
2. NSLP shall guarantee Eligible Loans held by the Lender which have
been acquired in conformance with the Program Rules. While the
Trust is in existence, Lender shall purchase Eligible Loans in an
amount not to exceed $1 billion In conjunction with the
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purchase of Eligible Loans, NSLP shall provide guarantee and
related services to Lender in conformance with the Act and the
Program Rules. NSLP shall review the principal amount of Eligible
Loans on a quarterly basis to determine compliance with respect
to this provision.
3. NSLP and the Lender agree that upon the default of a promissory
note and the filing of a claim on such promissory note by the
Lender, such claim shall be processed as provided for in the
Program Rules.
4. NSLP agrees to maintain reserves as defined by the Act for the
payment of claims/purchase of loans pursuant to the reinsurance
contracts with the Secretary of Education.
5. Lender shall only purchase Eligible Loans made by qualified
lenders to Eligible Borrowers permitted by the Program Rules.
6. The Lender, or its servicers, shall determine that each Eligible
Loan obligation is a legal, valid and binding obligation of the
Eligible Borrower, and shall engage in the requisite due
diligence relative to the purchase, servicing, and collection of
Eligible Loans as required by the Program Rules. Lender, or its
servicers, shall document in the loan file the basis on which it
made its determination and due diligence and retain the same for
the term required by the Program Rules. Lender acknowledges that
NSLP has no responsibility to review determinations or due
diligence activity of Lender.
7. Lender shall notify NSLP in writing if any servicing or
management of the Lender's Eligible Loans guaranteed by NSLP is
done by an entity other than Lender or by a servicer other than
Pennsylvania Higher Education Assistance Agency ("PHEAA") or EFS
Services, Inc.("EFS"), Lender's current servicers. Lender shall
provide NSLP with a copy of the current servicing agreement and
otherwise perform pursuant to the terms of the Program Rules as
they pertain to the use of a third party servicing entity.
8. Each Eligible Loan purchased by Lender has been made at an
interest rate not otherwise prohibited by the Act.
9. Each Eligible Loan shall be subject to repayment on the terms
stated in the Act.
10. The Lender agrees to remit to NSLP any applicable fees permitted
by the Act and the Program Rules or as otherwise required by
NSLP.
11. NSLP and the Lender agree that the guarantee on any particular
Eligible Loan shall be effective for the term of that Eligible
Loan on the effective date determined in accordance with the
Program Rules.
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12. In purchasing and servicing Eligible Loans from Eligible
Borrowers, the Lender agrees to comply with all applicable
federal and state laws in addition to (and not in conflict with)
the Program Rules.
13. In the event the Lender, its servicing agent, any prior
transferor, transferees or subsequent servicing agent shall
violate or fail to comply with the Program Rules with respect to
any Eligible Loan, Lender shall assume liability for and agrees
to indemnify and keep harmless NSLP, its successors, assigns,
directors, officers and agents 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 way relating to or arising out of such violation or
failure to comply with the Program Rules, irrespective of whether
NSLP shall have purchased such Eligible Loans from the Lender.
14. The Lender, or its servicers, shall maintain for all Eligible
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 ED and NSLP under
the Program Rules. For Eligible Loans paid in full or otherwise
discharged, the records shall be retained by the Lender, or its
servicers, as required by the Program Rules.
15. NSLP shall guarantee Eligible Loans without regard to sex, age,
race, color, religion, handicapped status, income, national
origin, or any other basis prohibited by applicable law. The
Lender will not discriminate in the acquisition of Eligible Loans
from originating lenders or in the treatment of Eligible
Borrowers on any prohibited basis.
16. This Agreement shall inure to the benefit of and be
binding upon NSLP, the Lender and their respective successors.
The rights of Lender hereunder may be assigned in whole or in
part by Lender to any permitted successor or to any purchaser of
all or any part of its interest in the loans covered by this
Agreement without NSLP's approval; provided, however: (i) that
NSLP shall be given advance notice of such assignment and (ii)
that Lender's obligations hereunder shall be assumed by any such
successor or purchaser in writing. NSLP acknowledges that Lender
will pledge the loans covered by this Agreement and all its
rights hereunder to Bankers Trust Company, not in its individual
capacity but solely as Indenture Trustee ("Indenture Trustee"),
and agrees that in the event Indenture Trustee forecloses upon
such collateral, Indenture Trustee may exercise any or all of
Lender's rights hereunder.
17. Subject to the prior written approval of the Lender, which
approval shall not be unreasonably withheld, NSLP may transfer
Eligible Loans which are guaranteed to any other guarantor which
has given NSLP its prior written approval of such transfer.
Lender may likewise transfer Eligible Loans to another
NSLP-approved lender or eligible holder, and shall notify NSLP of
any proposed transfer of NSLP guaranteed loans by sale, payoff or
pledge to such approved lender or eligible holder.
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18. This Agreement may be terminated by the Lender upon ninety
(90) days advance written notice to NSLP. The Lender is required
to give NSLP ninety (90) days advance written notice of
termination if the Lender intends to cease making Eligible Loans
under this Agreement. This Agreement may be terminated, suspended
or limited by NSLP in any manner provided for in the Program
Rules. Such termination, suspension or limitation shall not
affect the coverage of Eligible Loans previously guaranteed.
In addition, this Agreement may be terminated by NSLP upon ninety
(90) days written notice to the Lender in the event NSLP intends
to cease guaranteeing Eligible Loans of Lender. Lender will have
90 days from receipt of the termination notice to obtain a
guarantee from NSLP on all Eligible Loans acquired prior to
receipt of the termination notice.
19. Lender agrees to indemnify and hold harmless NSLP from any
obligations arising out of or related to Eligible Loans not
originated, acquired or serviced in the manner required by the
Act and the Program Rules.
20. NSLP agrees to reimburse the Lender for any federal special
allowance payments lost with respect to an individual loan as a
result of a delay in payment of a claim under this Agreement by
NSLP to the Lender with respect to such loan, provided that such
reimbursement is permissible under the Act and the Program Rules
and further provided that such delay is not due to Lender's (or
its servicer's) actions.
21. NSLP agrees upon written request to furnish a copy of its most
recent audited financial statements to any holder of record of
Notes or Certificates (each as defined in the Trust Agreement) of
KeyCorp Student Loan Trust 1999-A.
22. This Agreement shall be governed by the laws of the State of
Nebraska, except to the extent federal law and/or regulations
apply to the subject matter hereof. This Agreement shall not be
varied by oral agreement but only by an instrument in writing
duly executed by both parties. Any legal or equitable judicial
proceeding arising out of or related to this Agreement shall be
heard solely in the courts located in the City of Lincoln,
Lancaster County, Nebraska, as the forum of choice of the parties
to this Agreement. This Agreement represents the entire
understanding of the parties with respect to the subject matter
and supersedes all other communications between the parties.
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This Agreement is made as of July 13, 1998.
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity, but
solely as Eligible Lender Trustee
on behalf of KeyCorp Student Loan
Trust 1999-A:
ATTEST:
By: By:
----------------------------- ---------------------------------
Title: Title:
-------------------------- ------------------------------
NEBRASKA STUDENT LOAN PROGRAM, INC.
ATTEST:
By: By:
----------------------------- ---------------------------------
Nancy J. Wiederspan, President
Title:
--------------------------
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LENDER AGREEMENT FOR GUARANTEE OF
FEDERAL CONSOLIDATION LOANS WITH FEDERAL REINSURANCE
For loans eligible for guarantee under the Higher Education Act of
1965, as amended (the "Act")
WHEREAS, The First National Bank of Chicago, not in its individual
capacity but solely as Eligible Lender Trustee on behalf of the KeyCorp Student
Loan Trust 1999-A (the "Trust"), pursuant to the Trust Agreement dated as of
July 13, 1998, between Key Bank USA, National Association and the Eligible
Lender Trustee, as the same may be amended, including by way of amendment and
restatement, from time to time (the "Trust Agreement") located at, One First
National Plaza, Suite 0126, Chicago, Illinois 60670, Attn: Corporate Trust
Administration, using DE Lender ID number 833220 (the "Lender") wishes to secure
loan guarantees with the Nebraska Student Loan Program, Inc. ("NSLP") on
"Federal Consolidation Loans" (as hereinafter defined) made to "Eligible
Borrowers" (as hereinafter defined); and
WHEREAS, Lender represents that it is an "eligible lender" under the
provisions of the Act and the "Program Rules" (as hereinafter defined); and
WHEREAS, Lender has previously executed the NSLP Lender Agreement for
Guarantee of Student Loans with Federal Reinsurance.
NOW, THEREFORE, it is mutually agreed that:
1. The following words and terms shall have the following meanings
unless otherwise herein provided or unless that context or use
clearly indicates another or differing meaning or intent;
(a) "Act" shall mean Title IV, Part B, of the Higher Education
Act of 1965, as amended, the regulations promulgated
thereunder, and all official interpretations of federal
requirements as issued by the U.S. Department of Education
("ED");
(b) "Agreement" shall mean this Agreement;
(c) "Eligible Borrower" shall mean a borrower as defined by the
Act;
(d) "Eligible Loan" shall mean a loan as defined by the Act;
(e) "Federal Consolidation Loan" shall mean a student loan which
has been consolidated pursuant to and as defined by the Act;
(f) "Initial Principal Amount" shall mean the principal amount
of a Federal Consolidation Loan when made; and
(g) "Program Rules" shall include, but are not limited to, the
Act, all correspondence, the Common Manual - Unified Student
Loan Policy, NSLP Operations Alerts and NSLP
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correspondent materials. All such Program Rules, as amended
from time to time, are specifically incorporated into and
made a part of this Agreement.
2. NSLP shall guarantee Federal Consolidation Loans made or acquired
by the Lender which have been made in conformance with the Program
Rules.
3. NSLP and the Lender agree that upon the default with respect to a
promissory note and the filing of a claim on such promissory note
by the Lender, such claim shall be processed as provided for in
the Program Rules.
4. NSLP agrees to maintain reserves as defined by the Act for the
payment of claims/purchase of loans pursuant to the reinsurance
contracts with the Secretary of Education.
5. Lender shall make a Federal Consolidation Loan only to discharge
Eligible Loans upon an Eligible Borrower's request.
6. Lender shall make a Federal Consolidation Loan only to those
Eligible Borrowers permitted by the Program Rules.
7. With respect to each Federal Consolidation Loan, the Lender, or
its servicers, shall determine as to each Eligible Loan obligation
to be consolidated that each obligation:
(a) is a legal, valid and binding obligation of the Eligible
Borrower;
(b) was made and has been continuously serviced in accordance
with applicable laws and regulations and, if guaranteed,
requirements of the guarantor;
(c) each underlying loan is currently guaranteed under the Act
as of the date of the consolidation; and
(d) is not in default status as defined under the Act or the
Program Rules.
Lender, or its servicers, shall document in the loan file the
basis on which it made its determination and retain that
documentation for the term required by the Program Rules. Lender
acknowledges that NSLP has no responsibility to review such
determination of Lender.
8. Unless otherwise required by the Act, each Federal Consolidation
Loan shall be made in a principal amount which is equal to the sum
of the unpaid principal and accrued unpaid interest and late
charges of the Eligible Loans to be consolidated. The proceeds of
each Federal Consolidation Loan will be paid to the holder of each
loan to be consolidated to discharge the liability on such loans.
9. Each Federal Consolidation Loan shall be made at the interest rate
designated by the Act.
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10. Each Federal Consolidation Loan shall be subject to repayment on
the terms stated in the Act.
11. The Lender agrees to remit to NSLP any applicable fees permitted
by the Act and required by NSLP.
12. NSLP and the Lender agree that the guarantee on any particular
Federal Consolidation Loan shall be effective for the term of that
Federal Consolidation Loan determined in accordance with the
Program Rules, the effective date beginning on the date of receipt
by NSLP of any fee with respect to that Federal Consolidation Loan
or, if no fee is permitted or required, beginning on the date of
disbursement of that Federal Consolidation Loan.
13. In making Federal Consolidation Loans to Eligible Borrowers, the
Lender agrees to comply with all applicable federal and state laws
in addition to (and not in conflict with) the Program Rules.
14. The Lender agrees to notify NSLP in writing within 60 days from
the date that each Federal Consolidation Loan is made by Lender.
15. The Lender shall maintain for all Federal Consolidation 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 ED and NSLP under the Program
Rules. For Federal Consolidation Loans paid in full or otherwise
discharged, the records shall be retained by the Lender as
required by the Program Rules.
16. NSLP shall guarantee Federal Consolidation Loans without regard to
sex, age, race, color, religion, handicapped status, income,
national origin, or any other basis prohibited by applicable law.
The Lender will not discriminate in the making of loans to
Eligible Borrowers or in the treatment of such Eligible Borrowers
on any prohibited basis.
17. This Agreement shall inure to the benefit of and be binding upon
NSLP, the Lender, and their respective successors. The rights of
Lender hereunder may be assigned in whole or in part by Lender to
any permitted successor or to any purchaser of all or any part of
its interest in the loans covered by this Agreement without NSLP's
approval; provided, however: (i) that NSLP shall be given advance
notice of such assignment and (ii) that Lender's obligations
hereunder shall be assumed by any such successor or purchaser in
writing. NSLP acknowledges that Lender will pledge the loans
covered by this Agreement and all its rights hereunder to Bankers
Trust Company, not in its individual capacity but solely as
Indenture Trustee ("Indenture Trustee"), and agrees that in the
event Indenture Trustee forecloses upon such collateral, Indenture
Trustee may exercise any or all of Lender's rights hereunder.
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18. Subject to the prior written approval of the Lender, which
approval shall not be unreasonably withheld, NSLP may transfer
Federal Consolidation Loans which are guaranteed to any other
guarantor which has given NSLP its prior written approval of such
transfer.
19. This Agreement may be terminated by the Lender upon ninety (90)
days advance written notice to NSLP. The Lender is required to
give NSLP ninety (90) days advance written notice of termination
if the Lender intends to cease making Federal Consolidation Loans
under this Agreement. This Agreement may be terminated, suspended
or limited by NSLP in any manner provided for in the Program
Rules. Such termination, suspension, or limitation shall not
affect the coverage of Federal Consolidation Loans previously
guaranteed.
In addition, this Agreement may be terminated by NSLP upon ninety
(90) days written notice to the Lender, in the event that NSLP
intends to cease guaranteeing Federal Consolidation Loans of
Lender. Upon receipt of the termination notice, Lender shall
immediately cease origination and disbursement of all
Consolidation Loans. Lender will have 90 days from receipt of the
termination notice to obtain a guarantee from NSLP on all
Consolidation Loans originated and disbursed prior to receipt of
the termination notice.
20. Lender agrees to indemnify and hold harmless NSLP from any
obligations arising out of or related to Federal Consolidation
Loans not originated by Lender and serviced in the manner required
by the Act and the Program Rules.
21. NSLP agrees to reimburse the Lender for any federal special
allowance payments lost with respect to an individual loan as a
result of a delay in payment of a claim under this Agreement by
NSLP to the Lender with respect to such loan, provided that such
reimbursement is permissible under the Act and the Program Rules
and further provided that such delay is not due to Lender's (or
its servicer's) actions.
22. NSLP agrees upon written request to furnish a copy of its most
recent audited financial statements to any holder of record of
Notes or Certificates (each as defined in the Trust Agreement) of
KeyCorp Student Loan Trust 1999-A.
23. This Agreement shall be governed by the laws of the State of
Nebraska, except to the extent federal law and/or regulations
apply to the subject matter hereof. This Agreement shall not be
varied by oral agreement but only by an instrument in writing duly
executed by both parties. Any legal or equitable judicial
proceeding arising out of or related to this Agreement shall be
heard solely in the courts located in the City of Lincoln,
Lancaster County, Nebraska, as the forum of choice of the parties
to this Agreement. This Agreement represents the entire
understanding of the parties with respect to the subject matter
and supersedes all other communications between the parties.
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24. Nothing contained in this Agreement amends or modifies in any way
the Nebraska Student Loan Program, Inc. Lender Agreement for
Guarantee of Student Loans with Federal Reinsurance between Lender
and NSLP, including any addendum or amendment to that agreement.
This Agreement is made as of July 13, 1998.
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity, but
solely as Eligible Lender Trustee
on behalf of KeyCorp Student Loan
Trust 1999-A:
ATTEST:
By: By:
----------------------------- ---------------------------------
Title: Title:
-------------------------- ------------------------------
NEBRASKA STUDENT LOAN PROGRAM, INC.
ATTEST:
By: By:
----------------------------- ---------------------------------
Nancy J. Wiederspan, President
Title:
--------------------------
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