Document:

Filed by Bowne Pure Compliance

Exhibit 10.5

EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”), dated as of October 31, 2007 (“Effective Date”), is
entered into by John R. Kline (“Employee”) and National Education Loan Network, Inc. or its
designated affiliated company (“Company”).

WHEREAS, the Company desires to employ Employee in the capacity and on the terms and
conditions set forth herein, and Employee is willing to be so employed.

THEREFORE, in consideration of the mutual promises, covenants and conditions hereinafter set
forth, Employee and the Company agree as follows:

1. TERM.

1.1. The “Initial Term” of this Agreement shall be a four (4) year period which shall commence on
the Effective Date and shall terminate on the fourth anniversary thereof. Following the Initial
Term this Agreement may be extended for additional periods and on such terms as determined by
mutual agreement of the parties (each, a “Renewal Term”).

2. DUTIES AND RESPONSIBILITIES.

2.1. Employee shall be employed as the chief executive in charge a division and/or a subsidiary of
the Company which provides products and services related to online recruiting, enrollment and
education (the “Online Business”). In this capacity, he shall be responsible for such duties and
responsibilities as the Company may assign to him from time to time.

2.2. Employee shall participate as a member of the advisory board or committee of the Company’s
enrollment lead generation businesses, CUnet and Peterson’s, and will be a member of the Company’s
Strategic Coordination and Communications Team.

2.3. During the Initial Term and any Renewal Term, Employee shall devote his full time and efforts
to the Company, consistent with Company policies and procedures.

2.4. Employee and Company shall enter into one or more separate agreements providing for partial
ownership by Employee and the employees working for him (the “Online Team”), in subsidiaries or
affiliates of Company utilized in the pursuit of opportunities by the Online Business. Under the
terms of such agreements, the Online Team shall be entitled to purchase up to twenty percent (20%)
of the Company’s ownership of such ventures, subject to a maximum of ten percent (10%) of the total
equity in such ventures. For clarity, if the Company owns thirty percent (30%) of the venture, the
Online Team may purchase up to six percent (6%) of the total [.20 x .30 = .06], but if the Company
owns sixty percent of the venture, the Online Team may purchase only ten percent (10%) of the
total, not twenty percent (20%) of the Company’s ownership, which would exceed ten percent (10%) of
the total.

3. COMPENSATION AND BENEFITS.

3.1. Base Salary. Employee shall receive an annual base salary of three hundred sixty four
thousand dollars ($364,000) (“Salary”), less all required withholding, payable in accordance with
the Company’s normal payroll procedures as the same may change from time to time. The Salary shall
be reviewed by the Company from time to time and adjusted as determined by the Company in its
discretion.

 

 

3.2. Incentive Opportunity.

(a) Employee Incentive Opportunity. Subject to Employee’s satisfaction of the terms of this
Agreement, and his continued employment by the Company, Employee shall receive an annual incentive
bonus in the amounts set forth in the table below for each year of this Agreement (“Incentive
Opportunity”). The Incentive Opportunity for each year will be paid on or before March 15 of the
following year.

	 	 	 
	Year	 	Incentive
	2007
	 	$43,750
	2008
	 	$266,254 + $175,000 = $441,254
	2009
	 	$279,566
	2010
	 	$293,545
	2011
	 	$308,220

(b) Team
Incentive Opportunity. In addition to the amounts to be paid to Employee in
Section 3.2(a), the Online Team shall have an opportunity, based upon the level of their
performance as determined by the Company, to earn an annual incentive equal to ten percent (10%) of
the net income before taxes of the Online Business, to be divided among the Online Team, at
Employee’s discretion. At Employee’s election, this incentive may be paid to the Online Team in
either cash or in shares of Class A Common Stock of Nelnet, Inc. (“Stock”), or in a combination of
cash and Stock, and will be paid, if at all, on or before March 15 of the following year. All
amounts elected to be paid in Stock will be increased by 25% (the “Kicker”). For clarity, if the
incentive opportunity is $100,000 and Employee elects to have $60,000 paid in Stock and $40,000 in
cash, the amount of Stock paid will be $75,000 (125% of $60,000) and the amount of cash will be
$40,000. The portion of the original incentive amount paid in Stock will be paid in shares of Stock
vesting immediately, but restricted from sale for one year following the payment date, and the
Kicker will be paid in shares of Stock vesting over three years, one-third on each anniversary date
of the original award.

The Company will also consider additional incentive opportunities for the Online Team in connection
with such group’s potential future involvement in the Company’s lead generation businesses
including CUnet and Peterson’s.

3.3. Benefits. Employee shall be eligible to participate in such benefit programs as the
Company makes available for its employees.

3.4. Restricted Stock Grant. Employee shall receive a grant of 3,750 restricted shares of
Class A Common Stock of Nelnet, Inc., vesting over a ten year period and subject to the terms of a
separate Restricted Stock Agreement to be executed by Employee and Nelnet, Inc.

4. TERMINATION.

4.1. For Cause. The Company may terminate this Agreement at any time for Cause. For
purposes of this Agreement, “Cause” is defined as:

	 	(a)	 	the willful engaging by the Employee in conduct that is materially
injurious to or contrary to the best interests of the Company, monetarily or
otherwise;

 

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	 	(b)	 	the willful failure by the Employee to perform such duties as may be delegated
or assigned by, or to follow the directive or instructions of the Company, or of the
management of the Company in accordance with the terms of this Agreement and
consistent with Employee’s role;

	 
	 	(c)	 	material violation of any Company policy; or

	 
	 	(d)	 	the Employee’s conviction of, or plea of no contest to, a felony or any crime
involving moral turpitude.

4.2. Good Reason. The Employee may terminate this Agreement at any time with Good Reason.
For purposes of this Agreement, “Good Reason” shall mean the occurrence, without Employee’s
written consent, of any one of the following:

	 	(a)	 	Breach by the Company of its obligations under Section 3 of this Agreement;

	 
	 	(b)	 	A material reduction in Salary, Incentive Opportunity or benefits enjoyed by
the Employee;

	 
	 	(c)	 	A material reduction in the Employee’s authority, duty or responsibilities,
other than for Cause.

4.3 Without Cause. The Company may terminate this Agreement without Cause upon thirty (30)
days written notice to Employee.

4.4. Voluntary Resignation. Employee may terminate this Agreement without Good Reason upon
thirty (30) days written notice to the Company.

4.5 Severance.

	 	(a)	 	If the Employee’s employment with Company is terminated under Sections 4.2 or 4.3 above
prior to November 1, 2010, the Company shall pay the Employee severance in an amount which
is the greater of (i) two times Employee’s Salary; or (ii) $650,000, retention of which
shall be subject to the Employee’s agreement to and compliance with the provisions of
Section 5 below for a period of one year following the date of Employee’s termination.

	 
	 	(b)	 	If the Employee’s employment with Company is terminated under Sections 4.2 or 4.3 above
on or after November 1, 2010 and before the end of the Initial Term or any Renewal Term of
this Agreement, the Company shall pay the Employee severance in an
amount which is the
greater of (i) Employee’s Salary; or (ii) $350,000, retention of which shall be subject to
the Employee’s agreement to and compliance with the provisions of Section 5 below for a
period of one year following the date of Employee’s termination.

	 
	 	(c)	 	Any severance amount to be paid hereunder shall be paid in accordance with other
provisions of the Company’s severance policy, provided, however, all severance amounts shall
be paid on or before the date which is two and one-half months after the end of the tax year
in which the termination of employment occurs.

	 
	 	(d)	 	Other than wages due under applicable state law, no other amounts shall be payable to
Employee upon termination of his employment.

 

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5. RESTRICTIVE COVENANTS AND TRADE SECRETS.

5.1 Restrictive Covenant. In consideration of this Agreement, Employee agrees that in order
to protect the Company’s trade secrets and other intellectual property, during and for a period of
twelve (12) months following the termination for any reason of his employment or any consulting
relationship with the Company (as applicable, the “Restricted Period”), he will not engage, either
directly or indirectly, (i) in selling products and services substantially similar to those sold by
those portions of the business of the Company and the Company’s related or affiliated entities in
which or with which Employee was directly involved during his employment to, or soliciting with
respect to the sale of any such products and services, any Person with whom he had contact while
selling or attempting to sell services on behalf of the Company or its affiliates, or (ii) in
owning, managing, operating, joining, controlling, being employed or retained as a consultant or
independent contractor on behalf of, or participating in any manner in the ownership, management,
operation or control of or to be connected in any manner with any Person, firm, corporation,
company (other than the Company or its affiliates), partnership, joint venture or the like which in
any way, directly or indirectly, is engaged in any activity which is directly or indirectly
competitive with the products and services substantially similar to those offered by those
portions of the business of the Company or its affiliates in which or with which Employee was
directly involved during his employment in any geographic area in which the Company competes. The
Restricted Period shall be extended to add (a) any period of time in which Employee is or was
engaged in activities constituting a breach of this Section 5.1 and (b) any period of time required
to litigate activities of Employee constituting a breach of this Section 5.1. The parties
understand and agree that a breach hereof will cause irreparable injury to the Company or its
affiliates, that monetary damage would not provide an adequate remedy for such breach and therefore
the Company may elect to have this Section 5.1 specifically enforced by any court having equity
jurisdiction. In the event Employee fails, in any manner, to observe the requirements of this
Section 5.1, the Company shall be entitled to enforce such provisions against Employee, through any
remedies provided by Law, including but not limited to injunctive relief and pursue such other
remedies for relief which may be available pursuant to Law or this Agreement. During the
Restricted Period, Employee may not without the prior written consent of the Company or applicable
affiliate directly or indirectly solicit for hire or hire any employee of Company or its
affiliates, unless such employee has not been employed by the Company or any of its affiliates for
more than two (2) years from the date of such hire. Employee acknowledges and agrees that the
foregoing restrictions are reasonable and enforceable against him.

5.2 Trade Secrets. Employee understands and agrees that all names or identities of
customers, sales materials, pricing information, software programs, customer agreements, marketing
plans and other information furnished or made available to Employee or to which Employee has
access are confidential trade secrets (to the extent that such information would constitute trade
secrets under applicable Law) of the Company or its affiliates. Employee shall not, during or after
the term of this Agreement, disclose or use such information in any manner or for any reason or
purpose whatsoever, other than the purpose of promoting the Company’s or its affiliates’ business.
After the term of this Agreement, information which is generally known by the public as a result
other than disclosure by Employee, or which Employee possessed prior to employment, shall not be
subject to this paragraph 5.2.

6. MISCELLANEOUS.

6.1 Governing Law. This Agreement shall be governed, interpreted and construed under the
laws of the State of Nebraska without regard to its conflict of law principles.

6.2 Assignment. The rights and obligations of the parties hereto under this Agreement may
not be assigned in whole or in part without the prior written consent of the other party hereto
provided, however, that the Company may assign this Agreement in whole or in part to any of its
affiliates. This Agreement shall be binding upon and inure to the benefit of the parties hereto,
and their successors and permitted assigns.

 

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6.3
Modifications. This Agreement may be modified or otherwise amended only if such modification or
amendment is in writing and signed by both parties.

6.4 Notices. All notices and other communications under this Agreement shall be deemed to
have been duly given if delivered or mailed by regular United States mail, sufficient postage
pre-paid, addressed as follows:

If to the Company:

c/o Nelnet, Inc.

Attention: Todd M. Eicher, Executive Director

121 S. 13th Street, Ste. 201

Lincoln, Nebraska 68508

Telephone: 402/458 2740

Facsimile: 402/458-2294

and if to Employee:

John R. Kline

4197 East Meadowview Drive

Gilbert, AZ 85298

Telephone:

Facsimile:

or to any such address as either party may direct in writing delivered to the other party as
set forth herein.

6.5 Counterparts. This Agreement may be executed in counterparts which shall constitute one
instrument when taken together.

[SIGNATURES ON NEXT PAGE]

 

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HAVING READ AND UNDERSTOOD THIS AGREEMENT, CONSULTED COUNSEL OR VOLUNTARILY ELECTED NOT TO CONSULT
COUNSEL, AND HAVING HAD SUFFICIENT TIME TO CONSIDER WHETHER TO ENTER INTO THIS AGREEMENT, THE
UNDERSIGNED HEREBY EXECUTE THIS AGREEMENT AS OF THE EFFECTIVE DATE.

	 	 	 	 	 	 	 
	 	 	National Education Loan Network, Inc., Employer	 	 
	 
	 	 	 	 	 	 
	/s/ John R. Kline, 10/31/07
 

John R. Kline, Employee

	 	By:
	 	/s/ Todd M. Eicher
 

Title: Executive Director
	 	 

 

6Filed by Bowne Pure Compliance

EXHIBIT 10.1

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “***”.
A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING
CONFIDENTIAL TREATMENT UNDER RULE 24B-2 OF THE EXCHANGE ACT OF 1934.

AMENDMENT TO THE

LICENSE AND COOPERATION AGREEMENT

THIS AMENDMENT to that certain April 16, 1998 License and Cooperation Agreement (“Agreement”) by
and among Merz + Co. GmbH & Co. (“Merz”), Neurobiological Technologies, Inc. (“NTI”) and Children’s
Medical Center Corporation (“CMCC”) is entered into effective as of the 15th day of
February, 2008 by and among Merz, NTI and CMCC (each of which may be referred to herein
individually as a “Party” and collectively as the “Parties”). Capitalized terms used in this
Amendment shall have the meanings ascribed to them in the Agreement.

WHEREAS, pursuant to the Agreement, CMCC and NTI granted to Merz certain rights relating to
memantine and imposed upon Merz certain royalty obligations; and

WHEREAS the Parties, having reevaluated the subject matter of the Agreement, wish to modify the
financial terms set forth in the Agreement, along with certain ancillary provisions relating to the
rights and obligations of the Parties;

NOW, THEREFORE, pursuant to Section 19.7 of the Agreement, the terms and conditions of the
Agreement are amended as follows:

1. The definition of “Royalty Income” shall be amended by adding, at the very end of such
definition, the following sentence: “Provided, further, that Royalty Income shall expressly exclude
any and all income derived from any license, development and/or marketing agreement for Products
outside the United States and shall expressly be limited to income derived from the sale of
Products in the United States and Merz shall have no obligation whatsoever to share with NTI or
CMCC Royalty Income derived from the marketing, licensing or commercial exploitation of Products
outside the United States.”

2. Section 5.2 of the Agreement shall be amended by deleting from the last sentence thereof the
phrase “and subject to Exhibit C”.

3. Exhibit C of the Agreement shall be stricken in its entirety and replaced with the following:

With respect to Royalty Income derived from the sale of Products for the Merz Indication in
the United States, the parties shall be entitled to the following collective percentage
share of the Royalty Income:

 

 

 

	 	 	 	 	 
	 	 	ROYALTY INCOME PAYABLE TO	 
	 	 	CMCC AND NTI, COLLECTIVELY,	 
	 	 	ON SALES OF PRODUCTS IN THE	 
	YEAR/TIME PERIOD	 	UNITED STATES ONLY	 
	4th Quarter 2007 through
2nd Quarter 2008
	 	 	* * * 	%
	3rd and 4th Quarters 2008
	 	 	* * * 	%
	2009
	 	 	* * * 	%
	2010
	 	 	* * * 	%
	2011 and thereafter during the term of the
Agreement
	 	 	* * * 	%

The Royalty Income shall be allocated between NTI and CMCC in current proportions, i.e. * *
*% to NTI and * * *% to CMCC. (By way of illustration, as long as royalty is * * *%, NTI
shall be entitled to * * *% and CMCC to * * *%).

Payment for the 3rd Quarter 2007 in accordance with the Royalty Income due to NTI
and CMCC prior to this Amendment shall be made within three (3) business days of execution
hereof by all Parties, by wire transfer of immediately available funds to accounts
designated by NTI and CMCC in writing.

4. Section 10.5 of the Agreement shall be amended by deleting the last sentence thereof.

5. Section 10.6 of the Agreement shall be amended by adding, at the very end thereof, the following
sentence: “Provided, further, that no such notice of termination may be delivered prior to July 1,
2009 or become effective prior to January 1, 2010.”

6. In the event Merz files a patent infringement action in the United States alleging that a third
party has infringed United States Patent No. 5,614,560 (“the ‘560 Patent”) then, beginning on the
date of such filing and continuing for the life of the ‘560 Patent, notwithstanding Exhibit C as
amended hereby, Merz shall pay to CMCC and NTl, collectively, * * *% of the Royalty Income derived
from the sale of Products by Merz in the United States, provided, however, that if a District Court
or other tribunal of competent jurisdiction renders a decision that the ‘560 Patent is invalid,
unenforceable or not infringed in such action then the terms and conditions of Exhibit C as amended
hereby shall be reinstituted, beginning on the date of such decision.

7. NTI and CMCC each, on behalf of itself and its present and former officers, directors,
employees, investors, shareholders, administrators, predecessor and successor corporations,
affiliates, agents, and assigns, hereby fully and forever releases, acquits and discharges Merz and
its present and former officers, directors, employees, investors, shareholders, administrators,
predecessor and successor corporations, affiliates, agents, independent contractors, vendors,
vendees, customers, attorneys, all other persons acting for or on behalf of any or all of them, and
the predecessors, successors, and assigns of each of and from any claim, duty, obligation or cause
of action pursuant to the Agreement relating to Merz’s obligation to use commercially reasonable
efforts to identify and enter into agreements with a Marketing Partner in connection with the
development and exploitation of memantine and Products and to develop, market, license and
commercially exploit same, whether presently known or unknown, suspected or unsuspected.
The foregoing releases
do not extend to any other or prospective obligations under the Agreement or this Amendment.

 

	 	 	 
	* * *	 	Confidential Information, indicated by [***], has
been omitted from this filing and filed separately with the Securities and
Exchange Commission.

 

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8. Merz, on behalf of itself and its present and former officers, directors, employees, investors,
shareholders, administrators, predecessor and successor corporations, affiliates, agents, and
assigns, hereby fully and forever releases, acquits and discharges NTI and CMCC and its present and
former officers, directors, employees, investors, shareholders, administrators, predecessor and
successor corporations, affiliates, agents, independent contractors, vendors, vendees, customers,
attorneys, all other persons acting for or on behalf of any or all of them, and the predecessors,
successors, and assigns of each of and from any claim, duty, obligation or cause of action pursuant
to the Agreement relating to NTI’s and CMCC’s obligations relating to the license and the Patent
Rights, including without limitation the development and exploitation of memantine and Products,
whether presently known or unknown, suspected or unsuspected. The foregoing releases do not extend
to any other or prospective obligations under the Agreement or this Amendment, nor do the foregoing
releases extend to any unlicensed patent infringement.

9. Except as modified by this Amendment, all of the terms and conditions of the Agreement shall
remain in full force and effect.

 

3

 

	 	 	 	 	 	 	 	 	 	 	 
	Merz Pharma GmbH & Co. KgaA	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date: February 20, 2008	 	 	 	Date: February 20, 2008	 	 
	 
	By:

	 	/s/ Martin Zügel
 

	 	 	 	By:

	 	/s/ Christian Pertschy
 

	 	 
	Name:
	 	Dr. Martin Zügel
	 	 	 	Name:
	 	Dr. Christian Pertschy
	 	 
	Title:

	 	Chief Executive Officer
	 	 	 	Title:
	 	Chief Legal Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Children’s Medical Center Corporation	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date: 4/2/08	 	 	 	 	 	 	 	 
	 
	By:

	 	/s/ Erik Halvorsen	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	Name:

	 	Erik Halvorsen, Ph.D.	 	 	 	 	 	 	 	 
	Title:

	 	Director of Technology and Business
Development	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Neurobiological Technologies, Inc.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date: February 20, 2008	 	 	 	 	 	 	 	 
	 
	By:

	 	/s/ Paul E. Freiman	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	Name:

	 	Paul E. Freiman	 	 	 	 	 	 	 	 
	Title:

	 	President/CEO	 	 	 	 	 	 	 	 

 

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