AMENDMENT AGREEMENT



 





Exhibit 10.2.1





	 	 	CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT. THE SYMBOL “[****]” HAS BEEN INSERTED IN PLACE OF THE PORTIONS SO
OMITTED.





7th Amendment Agreement



This Amendment Agreement is entered into as of May 20, 2004 among Citibank,
N.A., as Trustee for The Student Loan Corporation (“Bank”), The Student Loan
Corporation (“SLC”) and Collegiate Funding Services, LLC (“CFS”).



WHEREAS the Bank, SLC and CFS are parties to a certain Consolidation Loan
Responsibility Agreement dated as of November 15, 1999 (the “Agreement”) which
provides for the marketing, servicing and funding of Consolidation Loans
pursuant to the provisions of the Federal Family Education Loan Program
(“FFELP”) through CFS’ program generally known as the Real World Consolidation
Loan Program (“RWCLP”); and



WHEREAS the Agreement was amended by a 1st Amendment Agreement dated as of
March 1, 2001 and executed March 7, 2001, by the 2nd Amendment
Agreement dated as of November 1, 2001 and executed November 19, 2001, by a 3rd
Amendment Agreement dated as of May 7, 2002 and executed July 25, 2002 by and
between the parties; by a 4th Amendment dated as of July 25, 2002; by
a 5th Amendment dated as of August 20, 2002 and executed November 12,
2002; and by a 6th Amendment dated as of April 3, 2003 and executed
April 10, 2003; and



WHEREAS the parties desire to further amend the Agreement for the mutual
benefit of the parties to permit CFS to offer any or all of the Borrower
Incentive Plans at any time as hereinafter set forth in greater detail; and



WHEREAS the parties desire to further amend the Agreement for the mutual
benefit of the parties to permit CFS to offer a supplemental pilot program
under which CFS will use the Citibank brand to market federal consolidation and
non-certified private loans.



NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by each party, the parties agree as
follows:






	1.	 	Section 7 of the Agreement is amended by changing the deductible on the
errors and omissions and liability policies from “$10,000”
to “$100,000.”
CFS acknowledges and agrees that CFS shall be responsible for payment of
this deductible in the event that CFS fails to perform any of its
responsibilities under the Agreement.
	 
	2.	 	Section 9 of the Agreement is amended as follows:







	 	A.	 	The following sentence is added after the first sentence:





 









 







	 	 	 	“Beginning June 1, 2004, the minimum Borrower Loan indebtedness must
be at least [****].”
	 
	 	B.	 	The following sentence is added after the last sentence of
the Section: “The Marketing Agent agrees to maintain an average
Application amount of [****] each month which the Bank will review
quarterly. Should the quarterly average monthly Application amount
(computed by adding the average monthly Application amounts for each
month in the quarter and dividing by 3) remain below [****].”







	3.	 	Section 11 is amended by deleting the present section and adding the
following in its place:
	 
	 	 	“11. Funding. The Bank agrees to fund [****]”
	 
	4.	 	Section 13 is amended by adding two new paragraphs at the end of Section
13 to read:
	 
	 	 	“The Application fees listed below shall apply to all SCA’s from the date of
the amendment until the end of the term of the agreement. The Application fee
for each of the Plans shall be: [****] for Plan A, [****] for Plan B, and
[****] for Plan C; however, notwithstanding the foregoing, [****].
	 
	 	 	In addition to the foregoing, except as otherwise set forth in the last two
sentences of this paragraph, CFS agrees that it shall offer to Bank all
successfully completed applications that it obtains from any borrower where the
borrower has at least one underlying loan previously made by Bank outstanding
prior to the time of the execution by the borrower of the CFS consolidation
loan application. Bank acknowledges that CFS (1) has committed to offer
successfully completed applications for federal consolidation loans where the
borrower is a resident of Mississippi or attends a school in Mississippi to the
Mississippi Higher Education Authority and (ii) has and may enter purchase
agreements for federal consolidation loan applications from unaffiliated third
party(ies),and Bank acknowledges that federal consolidation loan applications
that CFS is either committed as of the date hereof to offer and/or fund or
purchase from unaffiliated third parties under (i) and (ii) above, will not be
offered to Bank even if one of the underlying loans being consolidated was
previously made by Bank. For purposes herein the commitments referred to in
(i) and (ii) above shall be referred to as “Prior Commitments.”
	 
	5.	 	Section 14 entitled “Minimum Volume Commitment” is deleted in its entirety
and the following is substituted in lieu thereof:
	 
	 	 	CFS agrees to provide Bank and SLC an amount equal to at least [****] in
completed federal consolidation loan applications in calendar year 2004.
Beginning January 1, 2005, CFS shall offer to Bank [****] of its successfully
completed applications that are not subject to Prior Commitments. [****].
	 
	6.	 	Section 24 is deleted and the following inserted in its place:





 









 







	 	 	“The parties agree that the terms and provisions of this Amendment, including
but not limited to the new fees set forth in Section 13, shall be effective as
of May 20, 2004, the date of this Amendment. In addition, the parties hereto
agree that the terms and provisions of the Agreement shall remain in full force
and effect through December 31, 2007. The Agreement shall renew automatically
for additional one year terms unless one of the parties notifies the others in
writing of their intent not to renew at least 90 days prior to the expiration
of the initial or any renewal term.”
	 
	7.	 	A new section is added:







	 	1.	 	Program.







	 	 	The Citibank Program (“Program”) is a pilot test program which will be
conducted for 180 calendar days from the start date (“Test Phase”) and affords
CFS the opportunity to market federal consolidation loans and market, originate
and process non-certified private loans to selected non-SLC customers using the
Citibank brand. CFS agrees that any federal consolidation loans marketed by
CFS using the Citibank brand shall be sourced to Citibank, but shall not be
included in calculating the volume commitments being made by CFS to Citibank
under Section 14 herein. In addition, such federal consolidation loans shall
not be considered a “Prior Commitment” for purposes herein.







	 	2.	 	Test Phase







	 	 	The Test Phase will consist of a 180 calendar day period from a date that will
be mutually agreed upon by the parties during which CFS will send out Program
marketing materials by direct mail and/or the internet, to non-SLC customers
regarding the Programs for federal consolidation and non-certified private
loans. A detailed description of the non-certified private loan is described
on Exhibit A hereto. CFS shall review Program arrangements with SLC in detail
prior to the beginning of the Test Phase. Following CFS’ obtaining approval
from SLC to move forward with a particular offer relating to the federal
consolidation and/or non-certified Programs, the Citibank brand will be
included in the text of each Program mail piece or internet offering. SLC and
Bank shall review and approve all Program marketing and promotional pieces
before use by CFS within 3 business days of submission by CFS. CFS shall
perform all marketing, origination and processing relating to the Programs in
conformity with the other terms of this Agreement and the terms of all Program
contracts. In addition to the foregoing, CFS and Bank agree that, prior to the
mailing of any promotional pieces, CFS and Bank will “scrub” all customer lists
used by CFS in connection with offers relating to the Program against an
opt-out list provided by Bank and/or SLC in order to comply with federal Gramm
Leach Bliley laws and regulations.
	 
	 	 	CFS hereby indemnifies SLC and Bank from any and all loss, cost, damage or
expenses (including penalties, interest, reasonable expenses of investigation
and attorneys’ fees) incurred or arising out of (i) any failure by CFS to
comply with any of its obligations with respect to the Citibank branded Program
and any Program contract entered into by CFS, with any third parties, (ii) any
failure by CFS to comply with any applicable federal,




 









 







	 	 	state or local laws relating to the Citibank branded Program that is part of
the Test Phase; (iii) the use by CFS of the Citibank brand on marketing
materials relating to the Program that is not approved by Bank or SLC; or (iv)
any negligence or willful misconduct of CFS with respect to the marketing,
origination and processing of loans under the Citibank branded Program.







	 	3.	 	Fees







	 	 	During the Test Phase, for any non-certified private loan made under the
Program, CFS will pay SLC or Bank [****] of the principal amount of each funded
non-certified private loan, including any serial loan. On federal
consolidation loan applications, SLC or Bank shall pay CFS the fees provided in
this Agreement. CFS expressly acknowledges that it is committed to
compensating SLC and Bank for any non-certified private serial loan sourced
through the Program where the borrower obtained a prior Citibank branded loan
through the Program. CFS shall pay the non-certified private loan fees no
later than 30 days following receipt by CFS of compensation payable to CFS
under the Program.







	 	4.	 	Successful Program







	 	 	After the Test Phase is completed, the parties shall determine whether to
continue all or part of the Program and the terms under which it shall
continue. Any applications that have been submitted as of the end of the Test
Phase shall continue to be processed, and the parties shall be responsible for
the payment of any fees relating thereto.”




This 7th Amendment Agreement may be executed in counterparts, each of which may
be a fax copy of an original but all of which, when taken together, shall
constitute one and the same instrument.






	 	 	IN WITNESS WHEREOF, the parties have set their hands as of the first day
written above.





	 	 	 	 	 
	 
	 	 	 	 
	 	 	Collegiate Funding Services, LLC
	 
	 	 	 	 
	 	 	/s/ J. Barry Morrow



	 	 	J. Barry Morrow

	 	 	Chief Executive Officer

	 
	 	 	 	 
	 
	 	 	 	 
	 	 	The Student Loan Corporation
	 
	 	 	 	 
	

	 	By:
	 	/s/ Kristen Driscoll 
	

	 	 	 	








 









 





	 	 	 	 	 
	 

	 	Name:
	 	Kristen Driscoll
	

	 	 	 	

	

	 	Title:
	 	Vice President
	

	 	 	 	

	 
	 	 	 	 









	 	 	Citibank, N.A., as Trustee for The Student Loan Corporation





	 	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Mary K. Fiorille
	

	 	 	 	

	 
	 	 	 	 
	

	 	Name:
	 	Mary K. Fiorille
	

	 	 	 	

	 
	 	 	 	 
	

	 	Title:
	 	Vice President
	

	 	 	 	








 









 






EXHIBIT A

Non Certified Private Loan Program Description



Operating Model:




	 	 	 
	•

	 	CFS is Marketer
	•

	 	Charter One is Initial interim lender
	•

	 	FMC Originates
	•

	 	PHEAA is Servicer
	•

	 	FMC acquires the loan from Charter One via Securitization






Undergraduate and Graduate




	 	 	 	 	 	 	 
	Tier
	 	 	 	Rate
	 	Borr. Fee

	Tier 1
	 	Co-borrower [****]
	 	[****]	 	[****]
	 
	 	Student  [****]	 	 	 	 
	Tier 2
	 	Student [****]	 	[****]	 	[****]
	Tier 3
	 	Co-borrower [****]
	 	[****]	 	[****]
	 
	 	Student [****]	 	 	 	 
	Tier 4
	 	Co-borrower [****]
	 	[****]	 	[****]
	 
	 	Student  Below [****]	 	 	 	 
	Tier 5
	 	Co-borrower [****]
	 	[****]	 	[****]
	 
	 	Student with any or no FICO	 	 	 	 
















	*	 	2nd Borr. Fee is for total deferment. Graduate and CEL are automatically
deferred.





Continuing Education



	 	 	 	 	 	 	 
	Tier
	 	 	 	Rate
	 	Borr. Fee

	Tier 1
	 	Co-borrower [****]
	 	[****]	 	[****]
	 
	 	Student  [****]	 	 	 	 
	Tier 2
	 	Student [****]	 	[****]	 	[****]
	Tier 3
	 	Co-borrower [****]
	 	[****]	 	[****]
	 
	 	Student [****]	 	 	 	 
	Tier 4
	 	Co-borrower [****]
	 	[****]	 	[****]
	 
	 	Student  Below [****]	 	 	 	 
	Tier 5
	 	Co-borrower [****]
	 	[****]	 	[****]
	 
	 	Student with any or no FICO	 	 	 	 








Minimum Annual Loan Amount: [****]

Maximum Annual Loan Amount: [****]

Aggregate Maximum: [****]

Minimum Payment: [****]



Deferment Options:



	 	 	 
	Undergraduate Loans -
	 	Immediate Repay
Defer Interest Only
Total Deferment







 









 





Graduate and Career
Education Loan - Total Deferment Only



Repayment:




	 	 	 	 	 
	•

	 	$1,500 - $39,999
	 	(Up to 20 years)
	•

	 	$40,000 +
	 	(Up to 25 years)






Discount:
.25%
discount for ACH