Exhibit 10.21


 


Confidential Materials omitted and filed separately with the


Securities and Exchange Commission.  Asterisks denote omissions.


 


FIRST
AMENDMENT


 


TO


 


SETTLEMENT
AGREEMENT AND RELEASE


 


AMONG


 


(I)
EDUCATION ONE GROUP, INC., (II) SALLIE MAE, INC., (III) SECONDARY MARKET
SERVICES, LLC , (IV) SLM EDUCATION CREDIT FINANCE CORPORATION (COLLECTIVELY, “SALLIE
MAE” OR THE “SALLIE MAE PARTIES”), (V) JPMORGAN CHASE BANK, N.A, IN ITS
CAPACITY AS SUCCESSOR BY MERGER TO BANK ONE, NATIONAL ASSOCIATION (“BANK ONE”),
AND (VI) BANK ONE EDUCATION FINANCE CORPORATION


 


RECITALS


 


A.                                   The
Sallie Mae Parties, Bank One, and Bank One Education Finance Corporation, are
parties, along with others, to that certain Settlement Agreement and Release,
dated as of July 30, 2004 (the “Settlement Agreement”), pursuant to which
the Parties thereto agreed to resolve all disputes concerning the termination
of the Material Agreements, on the terms set forth in the Settlement Agreement.


 


B.                                     The
Parties to this First Amendment to Settlement Agreement and Release (“First
Amendment”) desire to amend the Settlement Agreement relating to Custom Deal
Loans, the terms of which are incorporated herein by this reference, as
hereafter set forth.


 


C.                                     The
Parties to this First Amendment further desire to amend the Settlement
Agreement to reflect the satisfaction of certain obligations relative to the
Marketing Agreement and the terms of the Settlement Agreement, as more
specifically outlined herein below.


 


Capitalized terms used herein, unless otherwise defined herein, have
the same meanings as in that certain Amended and Restated ExportSS Agreement
dated as of January 1, 2000, as amended by the Settlement Agreement.


 


NOW, THEREFORE, in consideration of the
Recitals, the Parties agree to amend the Settlement Agreement as follows:


 


1





















 


1.                                       Upon
execution by authorized representatives of all of the parties hereto, this
First Amendment shall be effective as of July 30, 2004.


 


2.                                       The
first sentence in Section 6.A. of the Settlement Agreement is hereby
amended and restated to read in its entirety as follows:


 


A.                                   The
Commitment Period under the ExportSS® Agreement, including without limitation
the Amendment of January 1, 2002 relating to MBA LOAN Private Loans and LAWLOAN
Private Loans (but subject to the modifications set forth in Section 6
hereof), is hereby extended to August 31, 2008; provided, however, that the Commitment Period shall be
further extended, solely with respect to the original term of each Custom Deal
with respect to the Custom Deal Loan that is described in Section 6.E(iii) below,
to coincide with the end date of the original term of such Custom Deal.  The terms of the ExportSS Agreement, as
amended by this Settlement Agreement, shall govern with respect to such Custom
Deal Loans.  In the event that a Custom
Deal with respect to the Custom Deal Loan that is described in Section 6.E(iii) below
is renewed by Sallie Mae beyond the original term of such Custom Deal and such
renewal is reflected in a revised related letter of understanding (a “Renewed
Custom Deal”), and Bank One and the applicable EOG Related Person have agreed
to Bank One’s participation in the Renewed Custom Deal at the applicable
school, it being understood that neither party is under any obligation to agree
to such participation in a Renewed Custom Deal at any such school, then with
respect to a Custom Deal Loan subject to such Renewed Custom Deal, the
Commitment Period shall be further extended, but solely with respect to the
renewal term of each such Renewed Custom Deal with respect to the Custom Deal
Loan that is described in Section 6.E(iii) below, to coincide with
the end date of the term of such Renewed Custom Deal.  The terms of the ExportsSS Agreement, as
amended by this Settlement Agreement, shall govern with respect to such Custom
Deal Loan during the term of such Renewed Custom Deal.


 


3.                                       Section 6.E.
of the Settlement Agreement is hereby amended and restated to read in its
entirety as follows:


 


E. Custom Deal Loans will include Loans made under the Act that are (i) MBALoans,
LAWLOANS, and MEDLOANS, (ii) loans made in connection with attendance at
the schools listed in Schedule 1 hereto (subject to the last two
sentences of Section 6.D(3) above), (iii) loans made in
connection with attendance at such


 


2





















 


other schools with respect to which Sallie Mae has agreed to provide
custom loan terms, which shall mean changes to its standard Signature Education
Loan, MBALoan private loan, LAWLOANS private loan, or MEDLOANS private loan
interest rates, terms, or credit criteria, changes to standard FFELP borrower
benefits, and/or Opportunity Loans, and such custom loan terms (as described in
clause 6.E(iii) immediately above) are set forth in a letter of
understanding executed by an EOG Related Person and such applicable schools (“Custom
Deal”), provided that Bank One and such EOG Related Person have agreed to Bank
One’s participation in the Custom Deal at such school, it being understood that
neither party is under any obligation to agree to such participation in a
Custom Deal at any such school, (iv) loans
made in connection with attendance at University of Phoenix for so long as
Sallie Mae has agreed to provide custom loan terms, as described in, or that
provide substantially identical benefits as the benefits described in, Schedule 9
hereto, to specific borrowers at such school (“University of Phoenix Custom
Deal”), and (v) loans made in connection with attendance at schools
located in a particular state for so long as Sallie Mae has agreed to provide
custom loan terms, as described in, or that provide substantially identical
benefits as the benefits described in, Schedule 9 herein to
specified borrowers in such state
(a “Statewide Benefit Deal”), provided that Bank One and the applicable EOG
Related Person have agreed to Bank One’s participation in the University of
Phoenix Custom Deal or in a State Wide Benefit Deal to any or all schools
within the applicable Statewide Benefit Deal state, it being understood that
neither party is under any obligation to agree to such participation in a
Statewide Benefit Deal to any or all schools within the applicable Statewide
Benefit Deal state or in the University of Phoenix Custom Deal (in each case of
sub-clauses (1) through (v) above in this Section 6.E or
collectively, “Custom Deal Loans”).  The
Parties hereby acknowledge that as of July 30, 2004 Sallie Mae provides
both, but is not obligated to continue to provide either, Statewide Benefit
Deals in connection with attendance at schools located in Louisiana, North
Carolina and Pennsylvania, as described in Schedule 9 to this
Settlement Agreement and the University of Phoenix Custom Deal.  The applicable EOG Related Persons agree that
they will not withdraw or terminate, during the course of any particular
Academic Year to take effect for or during that same Academic Year, Bank One’s
participation in a Statewide Benefit Deal or the University of Phoenix Custom
Deal in which Bank One and the applicable EOG Related Persons have agreed to
participate; provided, however, the applicable EOG Related Persons may withdraw
or terminate Bank One’s participation in


 


3





















 


such a Statewide Benefit Deal or the University of Phoenix Custom Deal
to take effect for any succeeding Academic Year by giving Bank One at least
sixty (60) days advance written notice before the beginning of such succeeding
Academic Year and, provided, further, that, if Bank One participates, the
applicable EOG Related Persons may at any time and in its sole discretion
amend, withdraw, or terminate a Statewide Benefit Deal and/or the University of
Phoenix Custom Deal only if it does so for all applicable EOG Related Persons
lending brands generally.  The Commitment
Period shall be extended, but solely with respect to the term of Bank One’s
participation in the applicable Statewide Benefit Deal and/or the University of
Phoenix Custom Deal, to coincide with the end date of Bank One’s participation
in such Statewide Benefit Deal and/or the University of Phoenix Custom Deal and
the terms of the ExportsSS Agreement, as amended by this Settlement Agreement,
shall govern with respect to a Statewide Benefit Deal and the University of
Phoenix Custom Deal.


 


4.                                       The
second sentence in Section 7.B. of the Settlement Agreement is hereby
amended and restated to read in its entirety as follows:


 


To effectuate the intent of this provision,
Bank One and Sallie Mae agree that Bank One shall not be obligated to pay to
Sallie Mae the Net Earnings owed under the USA LPA for the second calendar
quarter of 2004 in accordance with the terms of the USA LPA and, in turn,
Sallie Mae shall not be obligated to pay to Bank One the 50 basis point
Department of Education lender fee for all Loans sold pursuant to the USA LPA
on or after August 6, 2004.


 


5.(a). As it relates to Section 2.D.
of the Settlement Agreement, in consideration of Bank One’s payment of $580,476
to Sallie Mae, Inc., the obligations of the Bank One Related Persons with
respect to the payment of Marketing Fees, Liquidity Fees and Standby Commitment
Fees with respect to Education Loans that were disbursed prior to July 1,
2004 (the “Pre-Termination Period EOG Fees”) are completely and forever
discharged and satisfied.  The $580,476
payment referenced herein above is referred to herein below as the “Pre-Termination
Period EOG Fees Payment”.


 


5.(b). That the calculation of the amount
of the  Pre-Termination Period EOG Fees
Payment represents a compromise of an amount with respect to reconciliation of
which the parties had independently arrived at different results.


 


4





















 


5.(c). That as a result
of the making of the Pre-Termination Period EOG Fees Payment, the provisions of
Section 5 A. of the Settlement Agreement are hereby amended to
include the Pre-Termination Period EOG Fees within the scope of the EOG
Released Claims.


 


6.                                       Schedule 5
of the Settlement Agreement is hereby deleted in its entirety and replaced with
the revised Schedule 5 attached hereto.


 


7.                                       Section 6.B.
of the Settlement Agreement is hereby modified by adding the following sentence
immediately at the end of the third sentence:


 


The Parties agree that [**] and [**] shall be deemed to be Custom Deal
Loan Schools beginning with the 2005-2006 Academic Year and that all
Loans made in the 2005-2006 and subsequent Academic Years in connection
with attendance at such schools are subject to the Purchase Price as set forth
in Section 6.D.(2) below for so long as Sallie Mae has agreed to
provide custom loan terms, as described in, or that provide substantially
identical benefits as the benefits described in, the letters of understanding
applicable to each such school, annexed hereto as Schedule 10,
(provided that actual letters of understanding are executed by an EOG Related
Person and such schools), and the Parties additionally agree that,
notwithstanding anything in the ExportSS Agreement, as amended by this
Settlement Agreement, to the contrary, the Purchase Price for Loans made in connection
with attendance at the schools listed on Schedule 3 hereof that are
subject to or provided with Bank One’s or any of its affiliates’ national PLUS
Loan borrower benefits (a 3.6% credit based on the original Principal Balance
and applied to the outstanding Principal Balance of each eligible PLUS Loan (or
a cash rebate if available) after thirty-six (36) on time payments and a .25%
interest rate reduction for payments made automatically from a checking or
savings account) is (a) 100.00% of the aggregate Principal Balance of such
Loans; plus (b) 100.00% of the accrued interest that is payable by the
Borrowers; plus (c) solely for Loans that are sold within the time frames
set forth in Section 9 (Future Required Sales), a premium equal to [**]%
of the aggregate Principal Balance of such Loans.


 


Except as specifically provided for otherwise in this First Amendment,
the rights and obligations of each of the Parties under the Settlement
Agreement are unchanged.


 


5





















 


This First Amendment may be executed in one or more counterparts, but
in such event, each counterpart shall constitute an original and all of such
counterparts shall together constitute one instrument.  Accordingly, this First Amendment shall become
binding, notwithstanding the execution of separate originals, one by each of
the parties hereto.  Signatures hereto
exchanged by facsimile shall be binding for all purposes.


 


[SIGNATURE PAGE FOLLOWS]


 


6





















 


IN WITNESS WHEREOF, the parties hereto through each of their duly
authorized representatives have hereto set their hands on this
    day of March 2005.


 


	
  JPMORGAN CHASE BANK, N.A., in 

  its capacity as successor by

  merger to Bank One, National

  Association

  	
  EDUCATION ONE GROUP, INC.

  
	
   

  	
   

  
	
  By:

  	
    /s/ Jeffrey Levine

  	
   

  	
  By:

  	
  /s/ Mary Eure

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  Jeffrey Levine

  	
   

  	
  Name:

  	
  Mary Eure

  	
   

  
	
   

  	
   

  
	
  Title:

  	
    S.V.P

  	
   

  	
  Title:

  	
  Secretary

  	
   

  
	
   

  	
   

  
	
  BANK ONE EDUCATION FINANCE

  CORPORATION

  	
  SALLIE MAE, INC.

  
	
   

  	
   

  
	
  By:

  	
    /s/ Michael Getzler

  	
   

  	
  By:

  	
  /s/ Robert S. Lavet

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  Michael Getzler

  	
   

  	
  Name:

  	
  Robert S. Lavet

  	
   

  
	
   

  	
   

  
	
  Title:

  	
        Vice
  President

  	
   

  	
  Title:

  	
  S.V.P. & General Counsel

  	
   

  
	
   

  	
   

  
	
  SECONDARY MARKET SERVICES, LLC

  	
  J.P. MORGAN TRUST COMPANY,

  
	
  By: Sallie Mae, Inc.,

  Authorized Agent

  	
  N.A., acting as trustee and

  agent for Secondary Market

  Services, LLC

  
	
   

  	
   

  
	
  By:

  	
    /s/ Robert S. Lavet

  	
   

  	
  By:

  	
  /s/ James A. Alexander

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  Robert S. Lavet

  	
   

  	
  Name:

  	
  James A. Alexander

  	
   

  
	
   

  	
   

  
	
  Title:

  	
        S.V.P. &
  General Counsel

  	
   

  	
  Title:

  	
  Chief Financial Officer

  	
   

  
	
   

  	
   

  
	
  SLM EDUCATION CREDIT FINANCE

  CORPORATION

  	
   

  
	
   

  	
   

  
	
  By: Sallie Mae, Inc.,

  Authorized Agent

  	
   

  
	
   

  	
   

  
	
  By:

  	
    /s/ Robert S. Lavet

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  Robert S. Lavet

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
    S.V.P. & General
  Counsel

  	
   

  	
   

  
															



 


7





















 


SCHEDULE 5


 


Direct mail :


 


Summer campaign


August: $[**]


September: $[**] (est)


 


Fall campaign:


November : $[**](est.)


December:  $[**](est.)


 


Lending Tree Promotion: $[**](est) - $[**] per
month


Target Promotion: $[**](est.)   -
September


 


Total: $[**]


 


8





















 


SCHEDULE 9


 


University of Phoenix Custom Deal Terms 


 


Stafford Borrowers:


 


2% Payback @ Repay if you sign up for Manage Your Loan


4.5% Cashback after 33 on-time payments


 


PLUS Borrowers:


 


Payback - 1% Principal Reduction after 12
on-time payments and another 1% Principal Reduction after 24 on-time payments


 


Direct Repay - 25bp interest rate reduction
if you allow the payment to be directly withdrawn from your checking account.


 


9





















 


Pennsylvania PAybackSM Program Term Sheet


 


Stafford
Borrowers - Stafford borrowers attending
Pennsylvania schools will receive, at the beginning of repayment, a 2% credit
that is based on the original amount of each eligible Stafford loan.  To qualify for this benefit borrowers must:


 


•                  Attend a
Pennsylvania school;


•                  Enroll,
prior to repayment, in Manage Your LoansSM and agree, prior to
repayment, to receive account information at a valid e-mail address.


 


Note: The PAyback program is in addition to
the Sallie Mae Cash BackSM Program.


 


PLUS Borrowers - PLUS borrowers at
Pennsylvania schools may receive a 2% credit based on the original amount of
each eligible PLUS loan: 1% after the first 24 scheduled monthly on time
payments and another 1% after the next 24 scheduled monthly on time payments
have been made. The credit will be applied to the eligible loan following the
24th and 48th scheduled monthly on time payments if the
borrower has met all of the eligibility criteria. To qualify, PLUS borrowers
must:


 


•                  Have a
dependent child attending a Pennsylvania school;


•                  Enroll in
Manage Your Loans and agree to receive Sallie Mae account information at a
valid e-mail address; and


•                  Make their
first 48 scheduled monthly payments on time.


 


Note:  The PLUS PAyback Program
benefit is in addition to the PLUS Direct Repay benefit.


 


Eligible Guarantors:
Any FFELP guarantor may be used. USA Funds is the preferred guarantor.


 


10





















 


North Carolina PaybackSM  Program Term Sheet


 


Stafford
Loans - Stafford borrowers attending North Carolina schools will receive, at
the beginning of repayment, a 2% credit that is based on the original amount of
each eligible Stafford loan.  To qualify,
the borrower must:


 


•                  Attend
a North Carolina school;


•                  Graduate;


•                  Enroll,
prior to repayment, in Manage Your LoansSM and agree, prior to
repayment, to receive account information at a valid e-mail address.


 


Note: The North Carolina Payback benefit is in addition to the Sallie
Mae Cash BackSM Program
benefit.


 


PLUS Loans - PLUS
borrowers with children attending a North Carolina school may receive a 2%
credit based on the original amount of each eligible PLUS loan: 1% after the
first 24 scheduled monthly on time payments and another 1% after the next 24
scheduled monthly on time payments have been made.  The credit will be applied to the eligible
loan(s) following the 24th and 48th scheduled monthly on
time payments if the borrower has met all of the eligibility criteria.   To qualify, the borrower must:


 


•                  Have a
dependent child attending a North Carolina school;


•                  Enroll in
Manage Your LoansSM and agree to receive Sallie Mae account
information at a valid e-mail address; and


•                  Make their
first 48 scheduled monthly payments on time.


 


Note: 
The North Carolina PLUS Payback Program benefit is in addition to Direct
Repay.


 


Eligible Borrowers: Stafford and PLUS borrowers at North Carolina schools who obtain loans
through Bank One are eligible to receive these benefits.


 


Approval Requirements: For all schools in North Carolina are automatically profiled to receive
these benefits.


 


11





















 


Louisiana LagniappeSM  Program Term Sheet


 


Stafford
Loans - Stafford borrowers attending Louisiana schools will receive, at the
beginning of repayment, a 1.5% credit that is based on the original amount of
each eligible Stafford loan.  To qualify,
the borrower must:


 


•                  Attend
a Louisiana school;


•                  Graduate;


•                  Enroll,
prior to repayment, in Manage Your LoansSM and agree, prior to
repayment, to receive account information at a valid e-mail address.


 


Note: The Louisiana Lagniappe benefit is in addition to the Sallie Mae
Cash BackSM Program
benefit.


 


Eligible Borrowers: Stafford borrowers at Louisiana schools who obtain loans through Bank
One are eligible to receive these benefits.


 


Approval Requirements: For all schools in Louisiana are automatically profiled to receive
these benefits.


 


12





















 


SCHEDULE 10


 


[Attachment
was not attached at signing.]


 


13