EXHIBIT 10.84
LEHMAN BROTHERS BANK, F.S.B.
399 PARK AVENUE
NEW YORK, NEW YORK 10022
As of October 2, 2003
ACADEMIC MANAGEMENT SERVICES CORP.
One AMS Place
463 Swansea Mall Drive
Swansea, Massachusetts 02777
Attention: Rhonda Sayles
RE: MASTER REPURCHASE AGREEMENT (TOGETHER WITH EXHIBITS THERETO, THE
"MASTER REPURCHASE AGREEMENT") DATED AS OF AUGUST 7, 2003 BETWEEN
LEHMAN BROTHERS BANK, F.S.B., AS BUYER ("LBB") AND ACADEMIC MANAGEMENT
SERVICES CORP., AS SELLER ("AMS").
Ladies and Gentlemen:
WHEREAS, AMS and LBB have entered into the Master Repurchase Agreement
captioned above, and AMS and LBB are negotiating a current draft of the Flow
Student Loan Purchase and Warranties Agreement (the "Flow Purchase Agreement")
by and between LBB, AMS, Fleet National Bank ("Fleet") and Bank One, National
Association ("Bank One"); and
WHEREAS, the parties wish to amend the Master Repurchase Agreement as set forth
below; and
WHEREAS, in consideration of LBB's agreement to extend the Repurchase Date and
increase the maximum Purchase Price under the Master Repurchase Agreement, AMS
has agreed to pay to LBB an amendment fee; and
NOW, THEREFORE, in consideration of the premises and agreements contained herein
and for good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged by the parties hereto, the parties hereto hereby agree
as follows:
Terms used herein and not otherwise defined shall have the respective meanings
set forth in the Master Repurchase Agreement.
1. Pursuant to Section 20 of the Master Repurchase Agreement, the
definition of Repurchase Date set forth in Section 2 of the Master
Repurchase Agreement is hereby amended by deleting the existing
definition and replacing it with the following:
"Repurchase Date" means the date on which Seller is to
repurchase the Purchased Student Loans from Buyer which will
be the earlier of (a) the date of any withdrawal of the Sallie
Mae offer to purchase the Seller or the assets of the Seller,
(b) the date on which Seller makes any (i) payment on account
of, or set apart assets for, a sinking or other analogous fund
for the purchase, redemption,
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defeasance, retirement or other acquisition of any equity
interest of the Seller, whether now or hereafter outstanding,
(ii) makes any other distribution in respect of any of the
foregoing or to any shareholder or equity owner of the Seller,
either directly or indirectly, whether in cash or property or
in obligations of the Seller (other than as contemplated by
subclause (iii) immediately following) or (iii) makes any
payments on account of any debt to the Guarantor (other than
in reimbursement of amounts advanced by the Guarantor in
respect of subsequent disbursements on Federal Student Loans
that have been transferred to EFG-III, LP on which a first
disbursement was made on or before July 24, 2003 and for which
the subsequent disbursement was due and made by the Guarantor
after July 24, 2003), (c) the occurrence of an unwaived
default or event of default of Seller, its Affiliates, any
financing vehicles of the Seller, or the Guarantor under any
material agreement to which it is a party, (d) November 20,
2003, or (e) as otherwise determined by application of the
provisions of Sections 3, 5 or 13.
2. Solely with respect to the Transaction to be entered into on October 2,
2003 (and any roll of such Transaction into a new Transaction), Section
2 of the Master Repurchase Agreement is hereby amended by deleting the
existing definition of Purchase Price and replacing it with the
following:
"Purchase Price" means the price at which the Purchased
Student Loans for such Transaction are transferred by Seller
to Buyer or its designee, provided that in no event shall the
Purchase Price be greater than the price at which the
Purchased Student Loans for such Transaction are transferred
by Seller to Buyer or its designee, which shall be equal the
sum of (a) 96% of the lesser of (x) the unpaid principal
balance (such balance to include, in the case of Federal
Student Loans, accrued interest that is not then payable but
is to be capitalized and added to principal) for such
Purchased Student Loans and (y) the Market Value of the
related Purchased Student Loans; plus (b) $4,500,000 (the
"Amendment Fee Portion").
3. AMS and LBB hereby agree that with respect to the Amendment Fee Portion
of the Purchase Price of the Transaction to be entered into on October
2, 2003 (and any roll of such Transaction into a new Transaction), the
Pricing Rate shall be 0%.
4. Section 20 of the Master Repurchase Agreement is hereby amended by
deleting the existing section and replacing it with the following:
Section 20. Terminability. The Repurchase Date shall be
November 20, 2003 unless the Buyer and Seller agree in writing
to extend it for a period of 30 days therefrom. This Agreement
shall terminate upon the payment of the Repurchase Price for
all Transactions outstanding on the Repurchase Date and any
other amounts due hereunder.
5. Section 3(g) of the Master Repurchase Agreement is hereby amended by
deleting the existing section and replacing it with the following:
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(g) With respect to all Transactions hereunder the aggregate
Purchase Price of all Purchased Student Loans at any one time
subject to then outstanding Transactions shall not exceed
$275,000,000.
6. In connection with, and as a condition precedent to the effectiveness
of this Letter Amendment, AMS agrees to pay LBB an amendment fee of
$4,500,000. LBB and AMS agree that the Amendment Fee Portion of the
Purchase Price for the Transaction entered into on October 2, 2003 is
in payment of such amendment fee.
7. LBB and AMS hereby agree that, if the currently proposed sale of AMS to
Sallie Mae (the "AMS Sale Transaction") does not occur, is cancelled,
falls through, or otherwise will not be consummated by the November 20,
2003 or such later date acceptable to LBB, LBB shall purchase student
loans from AMS in accordance with the Flow Purchase Agreement. AMS
shall immediately notify LBB if the AMS Sale Transaction is cancelled,
otherwise falls through, or otherwise is not consummated in the time
frame originally contemplated.
8. Notwithstanding anything set forth in Section 3(f), AMS agrees that
upon the sale of any Purchased Student Loans, the purchase proceeds
with respect to such sale shall be paid to LBB to be applied against
the Repurchase Price with respect to all outstanding Transactions.
9. If LBB purchases the Purchased Student Loans pursuant to paragraph 7
above, LBB shall have the right to set off the related purchase price
under the Flow Purchase Agreement against any amounts payable by the
Seller (regardless of when due) under the Master Repurchase Agreement.
10. If LBB purchases Student Loans pursuant to paragraph 7, on the date the
final Final Settlement Amount (as defined in the Flow Purchase
Agreement) with respect to such Purchased Student Loans (as defined in
the Flow Purchase Agreement) is paid by LBB pursuant to the terms of
the Flow Purchase Agreement, LBB shall reimburse to AMS an amount equal
to the lesser of (a) $4,500,000 and (b) the sum of (i) $1,500,000 and
(ii) the product of 1% and the Principal Amount (as defined in the Flow
Purchase Agreement) of Purchased Student Loans (as defined in the Flow
Purchase Agreement), if any; provided, that LBB shall have the right to
set off such amount against any amounts payable by the Seller
(regardless of when due) under the Master Repurchase Agreement.
11. AMS and LBB agree to use their best efforts to finalize and execute the
Flow Purchase Agreement in form and substance substantially similar to
the current draft within 15 days of the date hereof. AMS agrees that it
shall use its best efforts to cooperate with LBB in causing the
conditions precedent under the Flow Purchase Agreement (other than the
condition precedent that the AMS Sale Transaction shall not have been
completed by November 20, 2003 or such later date acceptable to LBB) to
be satisfied, including immediately using commercially reasonable
efforts to cause Sallie Mae to enter into a servicing agreement with
LBB for the servicing of such Student Loans.
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12. AMS represents and warrants as follows: (a) AMS is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware, (b) the chief executive office and primary place of
business of AMS is located at One AMS Place, 463 Swansea Mall Drive,
Swansea, Massachusetts 02777, (c) (i) the execution, delivery and
performance by it of this Letter Amendment, and (ii) the performance by
it of the Master Repurchase Agreement, are within its powers, have been
duly authorized by all necessary action, and do not contravene (i) its
organization documents or (ii) any law or any contractual restriction
binding on or affecting it; (d) no authorization or approval or other
action by, and no notice to or filing with, any governmental authority
or regulatory body is required for (i) the due execution, delivery and
performance by it of the this Letter Amendment, or (ii) the performance
by it of its obligations pursuant to the Master Repurchase Agreement;
(e) the Master Repurchase Agreement and this Letter Amendment
constitute the legal, valid and binding obligation of AMS enforceable
against AMS in accordance with its terms, except as limited by
bankruptcy, insolvency, or other laws of general application relating
to the enforcement of creditors' rights and general principles of
equity; (f) AMS confirms that each of the representations and
warranties made by Seller pursuant to the Master Repurchase Agreement
are true and correct with respect to AMS as of the date hereof (except
for such representations and warranties that by their terms expressly
relate to an earlier date), (g) there is no pending or, to the
knowledge of AMS, threatened action or proceeding affecting AMS before
any governmental agency or arbitrator which may materially adversely
affect the ability of AMS to perform its obligations pursuant to the
Master Repurchase Agreement or this Letter Amendment; and (h) as of the
date hereof no default or event of default has occurred and is
continuing pursuant to the Master Repurchase Agreement.
13. This Letter Agreement constitutes an amendment to the Master Repurchase
Agreement, and, except as expressly amended and modified by this
Amendment, the Master Repurchase Agreement shall continue to be, and
shall remain, in full force and effect in accordance with its terms.
This Letter Amendment may not be amended or modified except in writing
and shall be governed by and construed in accordance with the laws of
the State of New York, without regard to principles of conflicts of
laws. The invalidity or unenforceability of any provisions of this
Letter Amendment shall not affect the validity or enforceability of any
other provision of this Letter Amendment, which shall remain in full
force and effect. This Letter Amendment may be executed in one or more
counterparts, together which shall constitute one and the same
instrument.
Very Truly Yours,
LEHMAN BROTHERS BANK, F.S.B.
By: ___________________________
Name:
Title:
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AGREED AND ACCEPTED:
ACADEMIC MANAGEMENT SERVICES CORP.
By: ______________________________
Name: Rhonda Sayles
Title: Vice President
[Guarantor Consent on next page]
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GUARANTOR CONSENT:
As of October 2, 2003
UICI, in its capacity as Guarantor pursuant to the Guaranty and Warranty
Agreement dated as of August 7, 2003 (the "Guaranty") hereby (i) confirms that
the Guaranty constitutes the legal, valid and binding obligation of the
Guarantor enforceable against the Guarantor in accordance with its terms, except
as limited by bankruptcy, insolvency, or other laws of general application
relating to the enforcement of creditors' rights and general principles of
equity; (ii) confirms that each of the representations and warranties made by it
pursuant to the Guaranty are true and correct with respect to it as of the date
hereof (except for such representations and warranties that by their terms
expressly relate to an earlier date), (iii) confirms that there is no pending
or, to the knowledge of UICI, threatened action or proceeding affecting the
Guarantor before any governmental agency or arbitrator which may materially
adversely affect the ability of the Guarantor to perform its obligations
pursuant to the Guaranty, and (iv) consents to the execution and delivery by AMS
of this Letter Amendment and affirms that its obligations pursuant to the
Guaranty shall remain in full force and effect on and after the date hereof.
UICI
By: ______________________________
Name: Greg Mutz
Title: Vice Chairman
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