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Title: |
Credit Agreement |
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Entities: |
AmSouth Bank; Comerica Bank; Nelnet, Inc.; Royal Bank of Canada; Student Loan Corp.; Wells Fargo Bank, NA; University of Missouri; Bank of America, NA; Bank of New York; Bank One Corp. |
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Date: |
2003 |
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Size: |
Preview shows 20KB of 512KB total |
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Price: |
$60 |
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ID: |
#366745 |
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Start of Preview |
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CREDIT AGREEMENT
among
NELNET, INC.
NATIONAL EDUCATION LOAN NETWORK, INC.
and
M&I MARSHALL & ILSLEY BANK,
SUNTRUST BANK,
FIRST NATIONAL BANK OF OMAHA AND
FIFTH THIRD BANK, INDIANA
dated
as of
September 25, 2003
{PAGE}
TABLE OF CONTENTS
{TABLE}
{CAPTION}
Page
----
{S} {C}
ARTICLE I REVOLVING LOAN FACILITY..................................................................... 15
Section 1.1. Revolving Loans............................................................ 15
ARTICLE II COMMERCIAL PAPER FACILITY.................................................................. 16
Section 2.1. Issuance................................................................... 16
Section 2.2. Participations............................................................. 16
Section 2.3. Reimbursement.............................................................. 17
Section 2.4. Repayment with Loans....................................................... 17
ARTICLE III GENERAL................................................................................... 18
Section 3.1. Application of Payments.................................................... 18
Section 3.2. Repayment of Loans......................................................... 18
Section 3.3. Interest................................................................... 18
Section 3.4. Borrowing Procedure........................................................ 19
Section 3.5. Prepayments................................................................ 20
Section 3.6. Minimum Amounts............................................................ 20
Section 3.7. Certain Notices............................................................ 20
Section 3.8. Use of Proceeds............................................................ 20
Section 3.9. Agent's Fees............................................................... 21
Section 3.10. Facility Fee............................................................... 21
Section 3.11. Computations............................................................... 21
Section 3.12. Termination or Reduction of Commitment..................................... 21
Section 3.13. Obligations................................................................ 21
Section 3.14. Method of Payment.......................................................... 22
Section 3.15. Application of Proceeds of Collateral...................................... 22
Section 3.16. Pro Rata Treatment......................................................... 23
Section 3.17. Borrowers' Acknowledgment of Benefit and Liability......................... 23
Section 3.18. Joint and Several Obligations Absolute..................................... 23
ARTICLE IV YIELD PROTECTION AND ILLEGALITY............................................................ 24
Section 4.1. Increased Cost and Reduced Return.......................................... 24
Section 4.2. Limitation on Loans........................................................ 25
Section 4.3. Illegality................................................................. 26
Section 4.4. Treatment of Affected Loans................................................ 26
Section 4.5. Compensation............................................................... 26
Section 4.6. Taxes...................................................................... 26
ARTICLE V CONDITIONS PRECEDENT........................................................................ 28
Section 5.1. Initial Loan............................................................... 28
Section 5.2. All Loans.................................................................. 29
ARTICLE VI REPRESENTATIONS AND WARRANTIES............................................................. 30
Section 6.1. Corporate Existence........................................................ 30
Section 6.2. Financial Statements....................................................... 31
Section 6.3. Corporate Action; No Breach................................................ 31
{/TABLE}
1
{PAGE}
{TABLE}
{S} {C}
Section 6.4. Operation of Business...................................................... 31
Section 6.5. Litigation and Judgments................................................... 32
Section 6.6. Rights in Properties; Liens................................................ 32
Section 6.7. Enforceability............................................................. 32
Section 6.8. Approvals.................................................................. 32
Section 6.9. Debt....................................................................... 32
Section 6.10. Taxes...................................................................... 33
Section 6.11. Margin Securities.......................................................... 33
Section 6.12. ERISA...................................................................... 33
Section 6.13. Disclosure................................................................. 33
Section 6.14. Subsidiaries............................................................... 33
Section 6.15. Agreements................................................................. 34
Section 6.16. Compliance with Laws....................................................... 34
Section 6.17. Investment Company Act..................................................... 34
Section 6.18. Public Utility Holding Company Act......................................... 34
Section 6.19. Environmental Matters...................................................... 34
Section 6.20. Labor Disputes and Acts of God............................................. 35
Section 6.21. Solvency................................................................... 35
Section 6.22. Loan Loss Reserve.......................................................... 35
Section 6.23. Financial Covenants........................................................ 35
ARTICLE VII POSITIVE COVENANTS........................................................................ 35
Section 7.1. Reporting Requirements..................................................... 36
Section 7.2. Maintenance of Existence; Conduct of Business.............................. 38
Section 7.3. Maintenance of Properties.................................................. 38
Section 7.4. Taxes and Claims........................................................... 38
Section 7.5. Insurance.................................................................. 39
Section 7.6. Inspection Rights.......................................................... 39
Section 7.7. Keeping Books and Records.................................................. 39
Section 7.8. Compliance with Laws....................................................... 39
Section 7.9. Compliance with Agreements................................................. 39
Section 7.10. Further Assurances; Subsidiary Joinder; New Securitization Residual........ 40
Section 7.11. ERISA...................................................................... 40
Section 7.12. Servicing Performance...................................................... 40
Section 7.13. Management................................................................. 40
ARTICLE VIII NEGATIVE COVENANTS....................................................................... 40
Section 8.1. Debt....................................................................... 40
Section 8.2. Limitation on Liens........................................................ 42
Section 8.3. Mergers, etc............................................................... 44
Section 8.4. Restricted Payments........................................................ 45
Section 8.5. Investments................................................................ 45
Section 8.6. Transactions With Affiliates............................................... 48
Section 8.7. Disposition of Property.................................................... 48
Section 8.8. Lines of Business.......................................................... 48
Section 8.9. Environmental Protection................................................... 48
Section 8.10. Prepayment or Payment of Debt.............................................. 49
Section 8.11. Portfolio Default Rates.................................................... 49
{/TABLE}
2
{PAGE}
{TABLE}
{S} {C}
ARTICLE IX FINANCIAL COVENANTS........................................................................ 49
Section 9.1. Consolidated Tangible Net Worth............................................ 49
Section 9.2. Maximum Leverage Ratio..................................................... 49
Section 9.3. Issuance of SLIMS or Securities Evidencing a Securitization Residual....... 50
Section 9.4. Minimum Loan Loss Reserve to Total Student Loans........................... 50
ARTICLE X DEFAULT..................................................................................... 50
Section 10.1. Events of Default.......................................................... 50
Section 10.2. Remedies................................................................... 53
Section 10.3. Performance by the Banks................................................... 54
Section 10.4. Continuance of Default..................................................... 54
Section 10.5. Setoff..................................................................... 54
Section 10.6. Amendments, Etc............................................................ 55
ARTICLE XI MISCELLANEOUS.............................................................................. 56
Section 11.1. Expenses; Indemnity........................................................ 56
Section 11.2. Limitation of Liability.................................................... 57
Section 11.3. No Duty.................................................................... 57
Section 11.4. No Fiduciary Relationship.................................................. 57
Section 11.5. Equitable Relief........................................................... 58
Section 11.6. No Waiver; Cumulative Remedies............................................. 58
Section 11.7. Successors and Assigns..................................................... 58
Section 11.8. Survival................................................................... 59
Section 11.9. ENTIRE AGREEMENT........................................................... 59
Section 11.10. Amendments................................................................. 59
Section 11.11. Maximum Interest Rate...................................................... 59
Section 11.12. Notices.................................................................... 61
Section 11.13. Governing Law; Submission to Jurisdiction.................................. 61
Section 11.14. Counterparts............................................................... 62
Section 11.15. Severability............................................................... 62
Section 11.16. Headings................................................................... 62
Section 11.17. Construction............................................................... 62
Section 11.18. Independence of Covenants.................................................. 62
Section 11.19. WAIVER OF JURY TRIAL....................................................... 62
Section 11.20. Securities Act of 1933..................................................... 63
Section 11.21. No Agency.................................................................. 63
ARTICLE XII THE AGENT................................................................................. 63
Section 12.1. Appointment and Powers..................................................... 63
Section 12.2. Responsibility............................................................. 63
Section 12.3. Agent's Indemnification.................................................... 64
Section 12.4. Rights as a Bank........................................................... 64
Section 12.5. Credit Investigation....................................................... 64
Section 12.6. Resignation................................................................ 65
Section 12.7. Withholding Tax............................................................ 65
{/TABLE}
3
{PAGE}
INDEX TO EXHIBITS
{TABLE}
{CAPTION}
Exhibit Description of Exhibit Section
------- ---------------------- -------
{S} {C} {C}
"A" Form of Note (Revolving and CP) 1.1, 2.4
"B" Matters to be Addressed by Opinion of Counsel 5.1(l)
"C" Borrowing Request 2.5
"D" Compliance Certificate 7.1(c)
"E" Guaranty 5.1(g)
"F" Subsidiary Joinder Agreement 1.1
"G-1" NELNET Security Agreement 5.1(h)
"G-2" NETWORK Security Agreement 5.1(h)
"H" Schedule of Banks 2.1
"I" Intercreditor Agreement 5.1(m)
{/TABLE}
INDEX TO SCHEDULES
{TABLE}
{CAPTION}
Schedule Description of Schedule
-------- -----------------------
{S} {C}
6.14 Subsidiaries
6.22 Loan Loss Reserve as of 3/31/03
6.23 Funded Debt to Leverage Denominator as of 3/31/03
8.1 Existing Debt
8.2 Existing Liens; Restrictions on Subsidiaries
{/TABLE}
4
{PAGE}
CREDIT AGREEMENT
THIS CREDIT AGREEMENT (the "AGREEMENT"), dated as of September
25, 2003, is among NELNET, INC. ("NELNET"), a corporation duly organized and
validly existing under the laws of the State of Nebraska and formerly known as
Nelnet Loan Services, Inc., NATIONAL EDUCATION LOAN NETWORK, INC. ("NETWORK"), a
corporation duly organized and validly existing under the laws of the State of
Nevada and formerly known as Nelnet, Inc. (NETWORK and NELNET, herein
individually a "BORROWER" and collectively "BORROWERS"), and M&I MARSHALL &
ILSLEY BANK ("M&I"), SUNTRUST BANK, FIRST NATIONAL BANK OF OMAHA and FIFTH THIRD
BANK, INDIANA (individually "BANK" and collectively the "BANKS") and M&I, in its
capacity as agent for the Banks (the "AGENT").
R E C I T A L S :
Borrowers have requested that the Banks consider making loans
to Borrowers from time to time under a revolving credit facility as described in
ARTICLE I of this Agreement and that M&I arrange for the issuance of commercial
paper, backed by a credit facility as described in ARTICLE II of this Agreement.
The Banks are willing to make such loans to Borrowers under the revolving credit
facility and provide the commercial paper facility, all upon the terms and
conditions hereinafter set forth.
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
DEFINITIONS
Section A. Definitions.
As used in this Agreement, the following terms have the
following meanings:
"2003 PUBLIC OFFERING" means the public offering of NELNET's
common stock pursuant to the Form S-1 filed by NELNET in August, 2003 with the
United States Securities and Exchange Commission.
"ADJUSTED EBTDA" means, for any period (the "SUBJECT PERIOD"),
the total of the following calculated on a consolidated basis without
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