Exhibit 10.1
AMENDMENT OF AGREEMENTS
This Amendment of Agreements (the "Amendment") is made and entered into
as of this 4th day of February, 2005, by and between Union Bank and Trust
Company, a Nebraska bank and trust company, acting in its own right and in its
capacity as trustee ("Union Bank") and National Education Loan Network, Inc.,
f/k/a Nelnet, Inc., a Nevada corporation ("Nelnet").
WHEREAS, Union Bank and Nelnet (or its subsidiaries or parent) have
entered into a series of agreements with respect to marketing, origination and
purchases of education loans made and guaranteed under the Higher Education Act
of 1965, as amended ("Student Loans") and now wish to amend, modify, restate
and/or terminate those agreements as further set forth herein, to be effective
as of January 1, 2005 (the "Effective Date"); and,
WHEREAS, in connection with such amendments, Union Bank will sell its
outstanding portfolio of Student Loans to Nelnet as of a date set forth below;
and,
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants herein contained, the parties hereto agree as follows:
1. Identification of Agreements. Nelnet (either directly or through
its subsidiary or its parent) and Union Bank are parties to the
following agreements (collectively, the "Agreements") with
respect to the Student Loans:
a. that certain Marketing Expense Reimbursement Agreement,
dated as of January 1, 1999, as amended by that certain
First Amendment dated as of April 1, 2001 and that
certain Second Amendment thereof dated as of December
21, 2001, under which Nelnet and Union Bank agreed to
the division of certain expenses related to marketing of
the Student Loans, (collectively, the "Marketing
Agreement");
b. that certain Agreement dated as of July 1, 1997, as
amended by that certain Amended and Restated Agreement
dated as of January 1, 1999 and as further amended by
that certain Agreement to Amend dated as of April 1,
2001, under which Union Bank agreed to sell and Nelnet
agreed to purchase certain Student Loans or rights
therein originated under the Union Bank brand name
(collectively, the "Purchase Commitment Agreement");
c. that certain Guaranteed Student Loan Program Servicing
Agreement dated as of January 1, 1998, under which
Nelnet, Inc. (formerly known as UNIPAC Service
Corporation) originates and services Student Loans for
Union Bank (the "Servicing Agreement");
d. that certain series of Guaranteed Purchase Agreements
dated, respectively, as of September 27, 1996, March 31,
2000 and March 19, 2001, under which Nelnet or its
subsidiaries agreed to purchase certain Student Loans
held in various trusts established through Union Bank
(collectively, the "Takeout Agreements"); and,
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e. that certain Amended and Restated Participation
Agreement dated as of June 1, 2001, as amended, under
which Nelnet sells and Union Bank, solely in its
capacity as trustee, purchases participation interests
in Student Loans (collectively, the "Participation
Agreement").
f. that certain Loan Sale and Commitment Agreement dated as
of April 1, 2002, under which Union Bank agreed to sell
to Student Loan Acquisition Authority of Arizona
("SLAAA") Student Loans over the period of time stated
therein (the "SLAAA Agreement").
2. Provisions with Respect to the Agreements. The Agreements are
hereby amended or otherwise modified as set forth below:
a. Marketing Agreement.
i. MARKETING EXPENSES AND ACTIVITIES. On and after
the Effective Date, Nelnet or Nelnet's designee
shall serve as the exclusive marketing agent for
Union Bank with respect to marketing activities
related to origination of Student Loans. Nelnet
will be responsible for all marketing costs
associated with such marketing activities. As of
the Effective Date, Nelnet will have the
exclusive, royalty-free license and right to use
Union Bank's name, the "ASAP" and "IHELP"
tradenames owned by Union Bank and Union Bank's
U.S. Department of Education Lender
Identification Numbers ("LID Nos.") with the
exception of LID No. 823964, for the purpose of
marketing, originating, disbursing and making
Student Loans, and Union Bank will engage in
only those marketing activities with respect to
Student Loans for Nelnet, any third party or on
its own behalf as Nelnet or its designee shall
perform on its behalf. Nelnet shall identify the
LID Nos. in which Student Loans are to be
originated or held from time to time. Union Bank
may use LID No. 823964 for the purposes of
originating and holding Student Loans that are
not eligible for sale to Nelnet as described in
Section 2(c)(i) hereof, Student Loans held as
trustee on behalf of others with Nelnet's prior
written consent, and Student Loans purchased by
Union Bank from other parties. Nelnet may change
the terms of any Student Loan borrower incentive
programs upon notice to Union Bank, provided
such programs are at Nelnet's sole cost.
ii. TERMINATION OF COMMITMENTS. All other provisions
of and commitments set forth in the Marketing
Agreement, including but not limited to those
relating to Reimbursement of Marketing Costs (as
defined in the Marketing Agreement), Union
Bank's right to retain certain Student Loans
and/or purchase certain Student Loans from
Nelnet, and restrictions on marketing other
brands at the University of Phoenix and Loma
Xxxxx University, will be terminated as of the
Effective Date.
b. Servicing Agreement.
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i. WAIVER OF FEES. Nelnet, Inc. shall waive the
following fees under the Servicing Agreement
with respect to any Student Loans required to be
sold hereunder on or after the Effective Date:
(A) all origination fees charged from and after
the Effective Date; and (B) all servicing fees
charged from and after the sale, pursuant to
this Amendment, of any such Student Loan. Union
Bank shall continue to be obligated to pay any
servicing fees under the Servicing Agreement
with respect to Student Loans in Union Bank's
existing portfolio as of the Effective Date
until such Student Loans are transferred to
Nelnet pursuant to Section 2(c)(iii) hereof, as
well as any Student Loans which Union Bank is
not otherwise obligated to sell to Nelnet.
ii. NO OTHER CHANGES. Nelnet, Inc. will continue to
originate and disburse Student Loans in Union
Bank's name under the Servicing Agreement,
subject to the funding and purchase arrangements
described in section 2.c.i. below. Union Bank
agrees to engage Nelnet, Inc. (or any other
agent consented to in writing by Nelnet) to
continue originations of Student Loans during
the life of all Student Loans originated
previously or hereafter in Union Bank's name
(until all such Student Loans are paid in full
by the borrower).
c. Purchase Commitment Agreement.
i. AMENDMENTS OF PURCHASE COMMITMENT AGREEMENT. The
Purchase Commitment Agreement is hereby amended
in the following respects:
A. Section 2.1 of the Purchase Commitment Agreement
is hereby deleted in its entirety, and the
following shall be inserted in lieu thereof:
Section 2.1 Sale of Origination Rights and Student Loans.
Subject to the terms and conditions of this Agreement, and in
express reliance upon the representations, warranties and
covenants as set forth herein, Purchaser or its designee
hereby purchases from Seller, and Seller hereby sells to
Purchaser or its designee, all of Seller's rights to and
interest in Seller's rights with respect to future
originations of Eligible Loans. Purchaser agrees to purchase
and Seller agrees to sell to Purchaser all right, title and
interest in and to all Eligible Loans owned now or hereafter
by or on behalf of Seller at the Purchase Price. Eligible
Loans shall be sold hereunder at the Purchase Price in sales
governed by the terms and conditions of the Loan Sale
Agreement or any subsequent standard loan purchase agreement
which Purchaser or its affiliates may utilize from time to
time. Eligible Loans shall be sold hereunder in portfolios
from time to time as Seller and Purchaser shall reasonably
agree, provided, however, that Seller agrees that each
Eligible Loan shall be sold no later than 60 days following
full disbursement thereof, or following initial disbursement
thereof, if so directed by Purchaser. Title to Eligible Loans
in which Purchaser or its affiliate has previously funded
through the purchase of a participation interest shall be
transferred to Purchaser without further consideration paid by
Purchaser therefor, and Purchaser shall be entitled to all
economic benefits of each such Student Loan from and after the
date of such participation. Seller shall sell Eligible Loans
only pursuant to this Agreement and shall not directly or
indirectly sell or refer Eligible Loans to any other person or
entity without the prior written consent of Purchaser. All
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Eligible Loans made or held by or on behalf of Seller shall be
originated and serviced by Nelnet, Inc. or another servicer
approved by Purchaser. Seller shall provide information with
respect to all Eligible Loans to be sold hereunder as
Purchaser may reasonably request, and Seller hereby authorizes
full access to its servicing records in connection with such
Eligible Loans. Without prior approval of Nelnet, during the
term of this Agreement and following termination of this
Agreement, Seller shall not directly or indirectly either make
or attempt to make consolidation loans to any Student Borrower
on any Eligible Loan sold by Seller pursuant to the terms of
this Agreement, or use or transfer to any other person or
entity any information with respect to any Student Borrower on
any Eligible Loan sold hereunder. This provision shall survive
termination of this Agreement. Seller shall continue and
maintain its status as an "eligible lender" under the Higher
Education Act, and shall perform all acts necessary,
convenient or upon the reasonable request of Nelnet in order
to facilitate the making of Eligible Loans in the future in
accordance with the Higher Education Act. Notwithstanding any
provision to the contrary herein, Seller shall not be
obligated to transfer to Purchaser any of the following types
of Student Loans (collectively, "Non-eligible Loans"): Student
Loans committed prior to January 1, 2005, for sale to Xxxxxx
Mae, Inc. under a pre-existing "Exportss" agreement with
Xxxxxx Xxx, and any Student Loans serviced by Montana Higher
Education Assistance Corporation prior to January 1, 2005.
B. The third, fourth and fifth sentences of Section
2.2, and the entirety of Sections 2.5, 2.6 and
3.1 of the Purchase Commitment Agreement, are
hereby deleted.
ii. LOAN ORIGINATIONS. As of the Effective Date, all
Student Loans originated under the Union Bank
name and Union Bank's U.S. Department of
Education Lender Identification Numbers for
which first disbursements are made on and after
the Effective Date will be immediately funded by
Nelnet or its affiliates by virtue of Union
Bank's sale of 100% participation interests
therein pursuant to Nelnet's or its affiliates'
then standard participation agreement. Union
Bank agrees to sell such Student Loans under the
terms set forth herein until the termination of
the Purchase Commitment Agreement or termination
of originations of Student Loans by or on behalf
of Union Bank, whichever is later. Student Loans
shall be purchased by Nelnet at the Purchase
Price defined in the Purchase Commitment
Agreement, except that such Purchase Price shall
not include and Union Bank shall not be
assessed, the $25.00 per Loan origination cost
set forth in the Servicing Agreement and
referenced in the definition of Purchase Price.
Nelnet shall reimburse Union Bank for any
origination fee due to the Department of
Education, any guarantee agency fee, or any
similar type of fee which may become due
following a change in the law with respect to
Student Loans to be purchased hereunder. Nelnet
shall not pay to Union Bank any portion of the
origination fee due to the Department of
Education with respect to any Student Loan so
purchased if Nelnet has previously paid for such
origination fee.
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iii. SALE OF EXISTING PORTFOLIO. Union Bank hereby
agrees to sell and Nelnet hereby agrees to
purchase, subject to the terms and conditions of
the Loan Sale Agreement executed in connection
with and as an exhibit to the Purchase
Commitment Agreement, Union Bank's entire
outstanding portfolio of Student Loans
(estimated to be approximately $600,000,000 as
of the date of sale), other than Non-eligible
Loans, at an amount equal to 100.0% of the
aggregate outstanding principal balances of such
Student Loans, plus 100.0% of accrued and unpaid
interest on such Student Loans, together with
other consideration provided by Nelnet in this
Amendment including without limitation the cash
paid by Nelnet pursuant to Section 3 hereof. The
parties shall use best efforts to consummate
such sale of Student Loans on or before February
1, 2005 and, in any event, no later than March
1, 2005. In the event Nelnet has not entered
into a servicing agreement with Colorado Student
Loan Program ("CSLP") by the scheduled sale date
of Student Loans serviced by CSLP, Union Bank
and Nelnet shall cooperate to use best efforts
to transfer all economic benefits in such
Student Loans serviced by CSLP.
iv. PURCHASED STUDENT LOANS. Union Bank may purchase
Student Loans or interests therein from other
parties upon receipt of prior written consent
from Nelnet. Nelnet will have the option,
without the obligation, to acquire any Student
Loans or interests therein purchased by or on
behalf of Union Bank under the same terms
applicable to Student Loans originated by Union
Bank (or the price paid by Union Bank for such
purchased Student Loans, if less). Union Bank
shall fund any such purchased Student Loans or
interests therein itself and shall be entitled
to the economic benefits therefrom until a sale
to Nelnet of such Student Loans or interest
therein.
d. SLAAA Agreement.
i. TERMINATION OF PURCHASE COMMITMENT. Nelnet shall
cause SLAAA to waive and terminate any yet
unfulfilled commitment of Union Bank to sell
Student Loans pursuant to the SLAAA Agreement as
of the Effective Date.
e. Takeout Agreements.
i. CONTINUATION OF AGREEMENTS. The Takeout
Agreements shall remain in force and effect
until terminated by mutual agreement of the
parties, subject to the amendments thereto set
forth below in this subsection 2(e).
ii. TERMINATION OF SALE REQUIREMENTS. As a result of
the amendments to the Purchase Commitment
Agreement above, Union Bank will no longer have
Student Loans periodically available under the
Takeout Agreements to sell to Nelnet and
accordingly, as of the Effective Date, the
provisions of such Agreements in the sections
entitled "Commitment to Purchase" and "Required
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Sales" shall be terminated. Nelnet shall not be
required to make any further payments in the
annual amount of $175,000 or otherwise to Union
Bank pursuant to the Takeout Agreements, and
Union Bank shall refund to Nelnet on the date of
this Amendment the prorated amount of such
payment for the period from the Effective Date
until April 1, 2005.
iii. PARTICIPATION OPPORTUNITIES. Nelnet will use
commercially reasonable efforts to make the
aggregate of approximately $150-$200 million of
participations of Student Loans available to
Union Bank, solely in its capacity as trustee in
the Short Term Federal Investment Trust grantor
trust program, at Nelnet's warehouse loan cost
of funds (as of December, 2004 approximately
0.225% over the 90-day Commercial Paper rate as
published in THE WALL STREET JOURNAL). Union
Bank will use commercially reasonable efforts to
hire Nelnet Capital LLC in transactions to
acquire and transfer interests in securities
such as Student Loan backed securities under
industry standard, arms-length terms.
3. Cash Consideration. On a date to be mutually agreed upon but in
no event later than the last date of sale of any existing
portfolio of Student Loans pursuant to Section 2(c)(iii) hereof,
Nelnet shall pay to Union Bank an amount equal to $20 million by
wire transfer of immediately available funds.
4. Indemnification. Nelnet agrees to indemnify and hold Union Bank
and its directors, officers, successors and agents harmless from
and against any losses, claims, damages or costs (including
reasonable attorneys fees) resulting from any breach by Nelnet
of any of the Agreements or negligence or willful and wrongful
conduct on the part of Nelnet with respect to Student Loans
originated and purchased by Nelnet hereunder.
5. Marketing by Union Bank. Union Bank may market its own banking
products (other than loans to fund educational costs) to
residents of the State of Nebraska who obtain Student Loans
which are made by Union Bank in its name and then transferred to
Nelnet pursuant to this Amendment, subject to any restrictions
in the customer privacy policies of Nelnet as they may be
amended from time to time.
6. Confidentiality. This Amendment is confidential information and
may not be copied or the terms disclosed to anyone other than
employees, accountants, attorneys or other professional advisors
of the parties hereto directly concerned with the transactions
contemplated herein, or as required by governmental or court
authority or applicable law, without the express written consent
of the other party hereto. Union Bank may disclose to customers
who invest in Student Loans through Union Bank's trust
department the event of the sale of Student Loans pursuant to
this Amendment.
7. Effect of Amendments. To the extent not otherwise modified,
amended or terminated by this Amendment, all terms and
provisions of the Agreements shall remain in full force and
effect without modification. This Amendment shall be effective
as of the Effective Date.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to Agreements
to be duly executed as of the day and year first written above.
UNION BANK AND TRUST COMPANY NATIONAL EDUCATION LOAN NETWORK, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxxxxxx Name: Xxxxx X. Xxxxxx
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Title: Sr. V.P. Title: Chief Financial Officer
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