Interest Rate Swap Confirmation between JPMorgan Chase Bank and Nelnet, Inc. and Nelnet Loan Services, Inc.
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This agreement confirms an interest rate swap transaction between JPMorgan Chase Bank and Nelnet, Inc. (including Nelnet Loan Services, Inc.), effective May 20, 2002. Under this swap, Nelnet pays a floating interest rate based on LIBOR plus a spread, while JPMorgan pays a fixed rate. The agreement covers three classes of notes with different notional amounts and termination dates. Payments are exchanged quarterly, and the contract is governed by the ISDA Master Agreement. The swap helps Nelnet manage interest rate risk on its student loan-related notes.
EX-10.67 94 y88696a1exv10w67.txt INTEREST RATE SWAP CONFIRMATION Exhibit 10.67 CONFIRMATION May 20, 2002 Nelnet, Inc. Nelnet Loan Services, Inc. 121 South 13th Street Suite 301 Lincoln, NE 68505 Attention: Terry J. Heimes Subject: Student Loan Rate Cap Transaction Swap Ref No:________________________ The purpose of this confirmation is to set forth the terms and conditions; of the above referenced rate cap transaction entered into on the Trade Date specified below (the "Swap Transaction") between JPMorgan Chase Bank ("JPMorgan") and, collectively, Nelnet, Inc. and Nelnet Loan Service, Inc. (the "Company"). This confirmation constitutes a "Confirmation" as referred to in the Master Agreement specified below. 1. This Confirmation is subject to, and incorporates, the 2000 ISDA Definitions, (the "ISDA Definitions"), published by the International Swaps and Derivatives Association, Inc. ("ISDA"), except that, for purposes of this Confirmation, all references to "Swap Transactions" in the ISDA Definitions will be deemed to be references to "Transactions". This Confirmation supplements, forms a part of and is subject to the ISDA Master Agreement and Schedule thereto dated as of May 20, 2002 (the "Master Agreement") between JPMorgan and the Company. All provisions contained in, or incorporated by reference to, the Master Agreement shall govern this Confirmation except as expressly modified below. In the event of any inconsistency between this Confirmation, the ISDA Definitions, or the Master Agreement, as the case may be, this Confirmation will control for purposes of the Transaction to which this Confirmation relates. 2. The terms of the particular Transaction to which this Confirmation relates are as follows: TRADE I Trade Date: May 20, 2002. Effective Date: May 20, 2002. Floating Rate Payer: The Company. Floating Rate Payer Payment Dates: Early Payment applies - three (3) Business Days prior to the applicable Period End Date or the Termination Date, as the case may be. Fixed Rate Payer: JPMorgan.
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5 TRADE II Trade Date: May 20, 2002. Effective Date: May 20, 2002. Floating Amount Payer: JPMorgan Termination Date: The earliest of (i) August 25, 2032, Date (ii) the Distribution following the end of the Collection Period during which the Pool Balance is reduced to zero; and (iii) the Distribution Date on which the principal balance of all the Class A-l Notes, Class A-2 Notes and the Class B Notes are reduced to zero. Floating Amount: An aggregate amount equal to any Floating Rate Payments made by the Floating Rate Payer to the Fixed Rate Payer under Trade I with respect to the corresponding Calculation Period. Floating Rate Period End Dates: The 25th day of each February, May, August, and November beginning August 26, 2002, and ending on the Termination Date, subject to adjustment in accordance with the Following Business Day Convention. Settlement: Subject to Section 3(1) below, the Floating Amount Payer shall pay the Floating Rate Payer under Trade I the Floating Amount on each Floating Rate Payer Payment Date. Notwithstanding the foregoing, the Floating Amount Payer shall be obligated to pay the Floating Amount on a Floating Rate Payer Payment Date only if: (i) the Floating Rate Payer's obligations under Trade I with respect to the applicable Floating Rate Payer Payment Date have been satisfied; and (ii) to the extent that sufficient Available Funds are in the Collection Fund to make the scheduled payment in accordance with Section 5.03(c)(x) of the Indenture or sufficient funds are available in the Reserve Fund to make the scheduled payment in accordance with Section 5.04 of the Indenture (as if the Floating Rate Payer under Trade I were one of the two "Counterparties" thereunder). If the Floating Amount is not paid on a Floating Rate Payer Payment Date in full, the unpaid amount, together with interest thereon at a rate of USD-LIBOR-BBA 6 accrued on a basis of Actual/360 shall be paid on the next succeeding Floating Rate Payer Payment Date on which funds are available therefore in accordance with the Indenture (as if the Floating Rate Payer under Trade I were one of the two "Counterparties" thereunder). On any day, the rate shall be the then current USD-LIBOR-BBA rate determined as set forth in the Trade I. 3. ADDITIONAL PROVISIONS; (a) Business Days. New York (b) Calculation Agent. Nelnet, Inc., acting in its capacity as the "Administrator" under the Administration Agreement. The Administrator shall act as Calculation Agent pursuant to the terms of the Administration Agreement and in accordance with the terms of the Schedule. Any calculations and determinations made by the Administrator as Calculation Agent shall be the same as the corresponding calculations and determinations made by it in its capacity as "Calculation Agent" under that certain Student Loan Rate Cap Transaction, evidence by a Confirmation, dated May 20, 2002, between Nelnet Student Loan Trust 2002-1 (the "Trust") and JPMorgan (the "Corresponding Swap Transaction"). (c) Governing Law. New York law. (d) Notice of Payment Amounts. The Calculation Agent shall provide notice to the Floating Rate Payer and the Fixed Rate Payer by at least 1:00 p.m. (New York City time) 1 Business Day prior to the Floating Rate Payer Payment Date with respect to Trade I of whether the Floating Rate Payer is required to make a payment and, if so, the amount of such payment together with reasonable details as to how the amounts were calculated. Notwithstanding anything herein to the contrary, if notice is received by the Floating Rate Payer after 1:00 p.m. (New York City time) 1 Business Day prior to each such Floating Rate Payer Payment Date, the Floating Rate Payer Payment Date shall be one Business Day after the day such notice is deemed to be received. For purposes hereof, any notice received on any day after 1:00 p.m. and/or any day that is not a Business Day shall be deemed received on the next Business Day. (e) Termination Payments: In the case of any early termination of this Transaction as a result of an Event of Default where JPMorgan is the Defaulting Party, any amount payable by JPMorgan pursuant to Section 6(e) of the Master Agreement shall be capped at an amount equal to the product of (x) 0.10% (10bps) and (y) the sum of the A-l Cap Notional Amount, A-2 Cap Notional Amount and B Cap Notional Amount as of the Early Termination Date. In the case of any early termination of this Transaction in which an amount is payable by the Company pursuant to Section 6(e) of the Master Agreement, such amount shall be capped at amount not to exceed (a) one half of the B Cap Notional Amount as of the date of such early termination less (b) all payments the Floating Rate Payer has made under Trade I prior to such early termination date net of any payments (other than payments of interest) made by the Floating Amount Payer to the Floating Rate Payer under Trade II. (f)Condition to Payments by JPMorgan: It shall be a condition precedent to each payment to be made under this Transaction by JPMorgan that JPMorgan shall have received the payment corresponding thereto (a "corresponding payment") that is due to it from the Trust under the Corresponding Swap Transaction. If any such corresponding payment is not received by JPMorgan as and when due, JPMorgan shall not be obligated to make payment hereunder unless and until it receives such corresponding payment. 4. ACCOUNT DETAILS: Payments to Party A: 7 For the Account of: JPMorgan JPMorgan Chase Bank ABA # 021-000-021 Account No. 999-97-341 Attn: Structured Products Trading For payment inquiries: JPMorgan Chase Bank Structured Products Trading 270 Park Avenue 8th Floor New York, New York 10017 Attn: Jaynita K. Pala Telephone No.: 212 ###-###-#### Facsimile No.: 212 ###-###-#### Payments to the Company: For the Account of: Nelnet, Inc. Union Bank and Trust ABA #104-910-795 A/C: # 601-435-2 Attn: Julie Waltke For payment inquiries: Nelnet, Inc. 121 South 13th Street Suite 301 Lincoln, NE 68505 Attention: Terry J. Heimes Facsimile No.: 402 ###-###-#### Telephone No.: 402 ###-###-#### Electronic Messaging System Details: None 5. OFFICES: (a) The Office of JPMorgan for this Transaction is 270 Park Avenue, 40th Floor, New York, New York 10017-2070, Attention: Legal Department-Capital Markets. Except as otherwise provided in the Schedule to the Agreement, the foregoing shall be the address for notices or communications to JPMorgan. (b) The Office of the Company for this Transaction is Nelnet, Inc 121 South 13th Street, Suite 301, Lincoln, Nebraska 68505, Attention: Terry J. Heimes. 6. ADDITIONAL DEFINITIONS: The following terms shall have the meanings set forth below when used in this Confirmation: "Calculation Period" means, in respect of a Swap Transaction and a party, each period from, and including, one Period End Date of that party to, but excluding, the next following applicable Period End Date during the Term of the Swap Transaction, except that (a) the initial Calculation Period for the party 8 will commence on, and include, the Effective. Date, and (b) the final Calculation Period for the party will end on, but exclude, the Termination Date. "Expected Interest Collections" means, with respect to any Collection Period, the sum of (i) the amount of interest accrued, net of amounts required to be paid to the Department or to be repaid to Guarantors or borrowers, with respect to the Financed Eligible Loans for such Collection Period (whether or not such interest is actually paid) and (ii) all Interest Benefit Payments and Special Allowance Payments expected to be received by the Trustee for such Collection Period (whether or not actually received), net of amounts required to be paid to the Department, with respect to the Financed Eligible Loans, to the extent not included in (i) above, and (iii) investment earnings on all Investment Securities held by the Trustee available for deposit in the Collection Fund for such Distribution Date. "Adjusted Student Loan Rate" means, with respect to any Calculation Period, the product of (a) the quotient obtained by dividing (i) 360 by (ii) the actual number of days elapsed in the relevant Calculation Period and (b) the percentage equivalent (not less than zero percent) of a fraction (i) the numerator of which is equal to Expected Interest Collections for the Collection Period relating to such Calculation Period less the Servicing Fee with respect to such relevant Collection Period and the Administration Fee and the Derivative Product Fees payable on the relevant Floating Rate Payer Payment Date, and (ii) the denominator of which is the Pool Balance as of the first day of such Collection Period. In addition, the terms "Administration Agreement", "Administration Fee", "Administrator", "Available Funds", "Class A-1 Notes, "Class A-2 Notes", "Class B Notes", "Collection Fund", "Collection Period", "Department", "Derivative Product Fees", "Derivative Product Payments", "Distribution Date", "Eligible Lender Trustee", "Guarantor", "Indenture", "Interest Benefit Payments", "Investment Securities", "Notes", "Pool Balance", "Servicing Fee", "Reserve Fund", "Special Allowance Payments", "Specified Reserve Fund Balance" and "Financed Eligible Loans" shall have the meanings when used in this Confirmation as ascribed to them in (i) the Amended and Restated Trust Agreement, dated as of May 1, 2002, by and among Nelnet Student Loan Funding, LLC, as the Initial Certificate holder and sponsor, and Wilmington Trust Company (in its individual capacity, the "Trust Company," ("Trust Company") and solely in its capacity thereunder, the "Delaware Trustee"), entered into in order to establish Nelnet Student Loan Trust 2002-1; or (ii) the Indenture of Trust, dated as of May 1, 2002 (the "Indenture"), by and between Nelnet Student Loan Trust 2002-1 (the "Issuer"), and Zions First National Bank, (together with its successors, the 'Trustee"), as trustee thereunder. 9 Please confirm chat the foregoing correctly sets forth the terms of our agreement by executing the copy of this Confirmation enclosed for that purpose and returning it to us. Very truly yours, JPMORGAN CHASE BANK By: /s/ JAMES DWYER ------------------------------ Name: JAMES DWYER Title: VICE PRESIDENT Accepted and confirmed as of the date first written above. NELNET, INC. By: /s/ Jeffrey R. Noordhoek ------------------------------ Name: Jeffrey R. Noordhoek Title: SVP NELNET LOAN SERVICES, INC. By: /s/ Edward P. Martinez ------------------------------ Name: Edward P. Martinez Title: Senior Vice President 10
