Exhibit 99.1
Confidential Materials omitted and filed
separately with the
Securities and Exchange Commission. Asterisks denote
omissions.
THIRD AMENDMENT dated and effective as of
February 1, 2005
To the
REFERRAL MARKETING AGREEMENT
Between
CHARTER ONE BANK, N.A.,
THE FIRST MARBLEHEAD CORPORATION,
And
COLLEGIATE FUNDING SERVICES, L.L.C.
This Third Amendment (this
“Amendment”) is entered into as of the 1 st
day of February, 2005 by and between Charter One Bank, N.A.
(“Bank”) The First Marblehead Corporation
(“Program Manager”), and Collegiate Funding Services,
L.L.C. (“Marketer”) to amend the Marketing Agreement
between Bank, Program Manager and Marketer dated May 15, 2002
(“Agreement”) as amended by Amendments to the Agreement
dated December 6, 2002 and May 1, 2003;
WHEREAS, the Agreement will terminate on May 1,
2005 if terminated by either of the parties pursuant to Paragraph
10.01 of the Agreement; and
WHEREAS, for the mutual benefit of the parties,
the Bank, Program Manager, and Marketer have agreed to amend the
Agreement to extend the term of the Agreement until July 1, 2007,
upon certain terms and conditions as set forth below;
NOW, THEREFORE, in consideration of the mutual
promises contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties, it is hereby agreed as
follows:
1.
A defined term “Alternative Student Loans” is added to
the Agreement as follows:
“‘Alternative Student
Loan’ means an education loan made to a student or parent to
finance costs of higher education, which loan is not insured or
guaranteed by any agency of the United States or of any
State.”
2.
Section 2.01 shall be amended to read in its entirety as
follows:
“Marketer shall perform the
services described in Exhibit B. Marketing Materials shall be
subject to the prior prompt review and approval by Program Manager
and Bank. Program Manager and Bank shall complete their
review of new Marketing Materials within five (5) Business Days
after receipt from Marketer. Marketer shall provide revised
proofs responsive to comments from
Program Manager and Bank, who in
turn shall respond to revisions within two (2) Business Days.
Before publishing any Marketing Materials, Marketer shall make all
changes identified by counsel for Program Manager and/or Bank as
legally required. Review of Marketing Materials shall be
coordinated through the Marketing Coordinator designated in Exhibit
B. Marketer shall report monthly to Program Manager with
respect to marketing efforts conducted by it as described in
Exhibit B and shall provide reasonable advance notice of all
material marketer campaigns.”
3.
A new Section 2.05 is added that reads as follows:
“2.05
Denied Referral Loan Applications . If a joint
marketing agreement is negotiated and executed between Marketer and
Bank and all other legal requirements are satisfied, Marketer shall
have the right to solicit any CFS Loan applicant who is denied a
Referral Loan by Bank for a federal Stafford or PLUS loan (made
under Title IV of the Higher Education Act of 1965, as amended) or
for other Alternative Education Loans or credit-based products that
do not conform to Program Descriptions as set forth in Exhibit A
(“Denial Solicitations”). Marketer and Bank shall bear
all responsibility to ensure that Denial Solicitations comply with
all applicable federal and state laws and regulations and Program
Manager shall have no compliance responsibility or liability of any
kind in connection with Denial Solicitations.”
4.
A new section 2.06 is added that reads as follows:
“2.06.
Minimum Expenditures in Marketing Effort . Beginning
May 1, 2005, Marketer agrees that it shall spend at least [**]
dollars ($[**]) in the period between May 1, 2005 through April 30,
2006; and at least [**] dollars ($[**]) between May 1, 2006 through
July 1, 2007) in its efforts to market CFS Loans. An officer
of Marketer shall certify that it has satisfied its expenditures
under this Section 2.06 upon the written request of Bank or Program
Manager and Program Manager shall have the right upon reasonable
prior written notice to audit the books and records of Marketer
during Marketer’s normal business hours to verify
Marketer’s compliance with this Section
2.06.”
5.
An new Section 2.07 shall be added
to the Agreement that reads as follows:
“2.07.
Marketing Program Development & Information .
Marketer and Program Manager agree to meet each quarter to discuss
the Marketer’s projected marketing activity. In
preparation of said quarterly meetings, Marketer shall provide
Program Manager with estimates that include expected telephone
responses and expected applications along with the timing of
mailings, telemarketing and other direct marketing programs for the
quarter. All parties shall consult in good faith regarding
reasonable marketing schedule modifications requested by any of the
parties to avoid application concentration.”
6.
A new Section 2.08 shall be added to the Agreement that reads as
follows:
“2.08
Bank and Program Manager agree to consult with Marketer regarding
the annual revisions to the Program Descriptions, which revisions
shall be conducted in accordance with the procedure set forth in
section 6 of the Guaranty Agreement between Bank and TERI, as in
effect from time to time (“Guaranty Agreement”).
Marketer understands and agrees that the Bank and TERI shall have
the right set forth in the Guaranty Agreement to adopt revisions to
the Program Descriptions, including but not limited to the guaranty
fees that TERI charges for CFS Loans. Bank and TERI shall notify
Marketer at least 30 days prior to the effective date of any
revision to the Program Descriptions and shall make every effort to
time any revisions to the Program Descriptions to the date of
compensation changes made in accordance with Section 3.01. Program
Manager agrees that its commitment to purchase CFS Loans applies to
each CFS Loan originated in accordance with the Program
Descriptions through and after termination of this Agreement.
Bank agrees, in consideration of Program Manager’s role in
arranging the purchase of CFS Loans in Securitization Transactions,
that no change shall be made in the Program Descriptions, including
the interest rate, origination fees, and consumer loan terms and
conditions, without Program Manager’s prior written consent,
which consent shall not be unreasonably withheld.”
7. &nbs
