EXHIBIT 1.1
Execution Copy
Nelnet Student Loan Trust 2004-4
$2,020,876,000
Student Loan Asset-Backed Notes
UNDERWRITING AGREEMENT
September 22, 2004
Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
as Underwriters
Ladies and Gentlemen:
Nelnet Student Loan Funding, LLC, a Delaware limited liability company
("Nelnet Funding") proposes to cause Nelnet Student Loan Trust 2004-4, a
Delaware statutory trust (the "Trust"), to sell to Citigroup Global Markets
Inc., X.X. Xxxxxx Securities Inc. and Xxxxxx Xxxxxxx & Co. Incorporated (each an
"Underwriter", and collectively the "Underwriters"), pursuant to the terms of
this Underwriting Agreement, $2,020,876,000 aggregate principal amount of the
Trust's Student Loan Asset-Backed Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5 and Class B Notes (the "Notes") in the classes and initial principal
amounts set forth on Schedule A hereto. Zions First National Bank, a national
banking association, will act as eligible lender trustee on behalf of the Trust
(the "Eligible Lender Trustee"). The Notes will be issued under an Indenture of
Trust, dated as of September 1, 2004 (the "Indenture"), between the Trust and
Zions First National Bank, a national banking association, as indenture trustee
(the "Indenture Trustee"). Upon issuance, the Notes will be secured by, among
other things, Financed Eligible Loans (as defined in the Indenture) pledged to
the Trustee and described in the Prospectus (as defined below). The Financed
Eligible Loans will be master serviced by National Education Loan Network, Inc.
("NELN"), f/k/a Nelnet, Inc., a Nevada Corporation, pursuant to a Master
Servicing Agreement, dated as of September 1, 2004 (the "Servicing Agreement"),
among NELN, as master servicer and administrator, Nelnet Funding and the Trust.
NELN has entered into a loan subservicing agreement with Nelnet, Inc.
("Nelnet"), f/k/a Nelnet Loan Services, Inc., a Nebraska Corporation, dated as
of September 1, 2004 (the "Subservicing Agreement") pursuant to which Nelnet
will act as subservicer with respect to all of the Financed Eligible Loans.
This Agreement, the loan purchase agreement, dated as of September 1,
2004 between the Trust and Nelnet Funding (along with the related Loan Transfer
Addendum, the "Nelnet Funding Purchase Agreement"), the loan purchase agreement,
dated as of September 1, 2004 between Nelnet Funding and Nelnet Education Loan
Funding, Inc. ("NELF") (along with the related Loan Transfer Addendum, the "NELF
Purchase Agreement"), the loan purchase agreement, dated as of September 1, 2004
between NHELP III, Inc. ("NHELP III") and Nelnet Funding (along with the related
Loan Transfer Addendum, the "NHELP III Purchase Agreement"), the loan purchase
agreement, dated as of September 1, 2004 between EMT Corp. ("EMT," and together
with NELF and NHELP III, the "Sellers") and Nelnet Funding (along with the
related Loan Transfer Addendum, the "EMT Purchase Agreement" and, together with
the Nelnet Funding Purchase Agreement, the NHELP III Purchase Agreement and the
NELF Purchase Agreement, the "Purchase Agreements"), the trust agreement, dated
as of September 1, 2004, between Wilmington Trust Company, as Delaware trustee
(the "Delaware Trustee") and Nelnet Funding, as initial certificateholder and
sponsor (the "Trust Agreement"), the administration agreement, dated as of
September 1, 2004, among the Trust, the Delaware Trustee, the Indenture Trustee
and NELN, as administrator (the "Administration Agreement"), the eligible lender
trust agreement, dated as of September 1, 2004, between Zions First National
Bank (in such capacity the "Eligible Lender Trustee", and together with the
Indenture Trustee, the "Trustee") and Nelnet Funding (the "Nelnet Funding
Eligible Lender Agreement"), the Eligible Lender Trust Agreement, dated as of
September 1, 2004, between the Eligible Lender Trustee and the Trust (the "Trust
Eligible Lender Agreement", and together with the Nelnet Funding Eligible Lender
Agreement, the "Eligible Lender Agreements"), the custodian agreement, dated
September 1, 2004, among the Trust, the Trustee and Nelnet, as custodian (the
"Custodian Agreement"), the indemnity agreement, dated as of September 22, 2004,
among Nelnet and the Underwriters (the "Indemnity Agreement"), the Servicing
Agreement, the Subservicing Agreement and the Indenture shall collectively
hereinafter be referred to as the "Basic Documents."
Capitalized terms used herein without definition shall have the
meanings ascribed to them in the Indenture or the Prospectus.
Nelnet Funding proposes to cause the Trust, upon the terms and
conditions set forth herein, to sell to each of the Underwriters on the Closing
Date (as hereinafter defined) the aggregate principal amount of each Class of
Notes set forth next to the name of each Underwriter on Schedule A at the rates
and maturities listed on Schedule B hereto.
Nelnet Funding wishes to confirm as follows this Agreement with the
Underwriters in connection with the purchase and resale of the Notes.
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1. Agreements to Sell, Purchase and Resell. (a) On the Closing Date,
Nelnet Funding hereby agrees, subject to all the terms and conditions set forth
herein, to cause the Trust to sell to each of the Underwriters and, upon the
basis of the representations, warranties and agreements of Nelnet Funding herein
contained and subject to all the terms and conditions set forth herein, on the
Closing Date each of the Underwriters severally and not jointly agrees to
purchase from the Trust, such principal amount of each Class of the Notes to be
sold on the Closing Date at such respective purchase prices as are set forth
next to the name of each Underwriter on Schedule A hereto.
(b) It is understood that the Underwriters propose to offer
the Notes for sale to the public (which may include selected dealers) as set
forth in the Prospectus.
2. Delivery of the Notes and Payment Therefor. Delivery to the
Underwriters of and payment for the Notes shall be made at the office of Stroock
& Stroock & Xxxxx LLP, New York, New York, at 1:00 p.m., New York City time, on
September 29, 2004 (the "Closing Date"). The place of such closing and the
Closing Date may be varied by agreement between the Underwriters and Nelnet
Funding.
On the Closing Date, the Notes will be delivered to the Underwriters
against payment of the purchase price therefor to the Trust in Federal Funds, by
wire transfer to an account at a bank acceptable to the Underwriters, or such
other form of payment as to which the parties may agree. Unless otherwise agreed
to by Nelnet Funding and the Underwriters, each Class of Notes will be evidenced
by a single global security in definitive form deposited with the Trustee as
custodian for DTC and/or by additional definitive securities, and will be
registered, in the case of the global Classes of Notes, in the name of Cede &
Co. as nominee of The Depository Trust Company ("DTC"), and in the other cases,
in such names and in such denominations as the Underwriters shall request prior
to 1:00 p.m., New York City time, no later than the business day preceding the
Closing Date. The Notes to be delivered to the Underwriters shall be made
available to the Underwriters in Denver, Colorado, for inspection and packaging
not later than 9:30 a.m., Denver time, on the business day immediately preceding
the Closing Date.
3. Representations and Warranties of Nelnet Funding. Nelnet Funding
represents and warrants to each of the Underwriters that:
(a) A registration statement on Form S-3 (No 333-108649),
including a prospectus and such amendments thereto as may have been
required to the date hereof, relating to the Notes and the offering
thereof from time to time in accordance with Rule 415 under the
Securities Act of 1933, as amended (the "Act"), has been filed with the
Securities and Exchange Commission (the "SEC" or the "Commission") and
such registration statement, as amended, has become effective; such
registration statement, as amended, and the prospectus relating to the
sale of the Notes offered thereby constituting a part thereof, as from
time to time amended or supplemented (including the base prospectus,
any prospectus supplement filed with the Commission pursuant to Rule
424(b) under the Act, the information deemed to be a part thereof
pursuant to Rule 430A(b) under the Act, and the information
incorporated by reference therein) are respectively referred to herein
as the "Registration Statement" and the "Prospectus" respectively; and
the conditions to the use of a registration statement on Form S-3 under
the Act, as set forth in the General Instructions to Form S-3, and the
conditions of Rule 415 under the Act, have been satisfied with respect
to the Registration Statement.
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(b) On the effective date of the Registration Statement, the
Registration Statement and the Prospectus conformed in all respects to
the requirements of the Act, the rules and regulations of the SEC (the
"Rules and Regulations") and the Trust Indenture Act of 1939, as
amended, and the rules and regulations thereunder (the "Trust Indenture
Act"), and, except with respect to information omitted pursuant to Rule
430A of the Act, did not include any untrue statement of a material
fact or, in the case of the Registration Statement, omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading and, in the case of the Prospectus,
omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and on the
date of this Agreement and on the Closing Date, the Registration
Statement and the Prospectus will conform in all respects to the
requirements of the Act, the Rules and Regulations and the Trust
Indenture Act, and neither of such documents included or will include
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that the foregoing does not
apply to statements in or omissions from the Registration Statement or
the Prospectus based upon written information furnished to Nelnet
Funding by the Underwriters, specifically for use therein (it being
understood that the only such information is the information specified
in Section 11 hereof). Nelnet Funding and the Underwriters acknowledge
that no Computational Materials (as defined in the No-Action Letter of
May 20, 1994 issued by the Commission to Xxxxxx, Xxxxxxx Acceptance
Corporation I, Xxxxxx, Peabody & Co. Incorporated and Xxxxxx Structured
Asset Corporation, as made applicable to other issuers and underwriters
by the Commission in response to the request of the Public Securities
Association dated May 24, 1994, and the No-Action Letter of February
17, 1995 issued by the Commission to the Public Securities Association)
were delivered by or on behalf of Nelnet Funding to prospective
purchasers of the Notes.
(c) The Commission has not issued and, to the best knowledge
of Nelnet Funding, is not threatening to issue any order preventing or
suspending the use of the Registration Statement.
(d) As of the Closing Date, each consent, approval,
authorization or order of, or filing with, any court or governmental
agency or body which is required to be obtained or made by Nelnet
Funding or its affiliates for the consummation of the transactions
contemplated by this Agreement shall have been obtained, except as
otherwise provided in the Basic Documents.
(e) The Indenture has been duly and validly authorized by
Nelnet Funding and, upon its execution and delivery by the Trust and
assuming due authorization, execution and delivery by the Trustee, will
be a valid and binding agreement of the Trust, enforceable in
accordance with its terms, except as enforcement thereof may be limited
by bankruptcy, insolvency or other similar laws affecting creditors'
rights generally and the Indenture will conform in all material
respects to the description thereof in the Prospectus. The Indenture
has been duly qualified under the Trust Indenture Act with respect to
the Notes.
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(f) The Notes have been duly authorized by the Trust and the
Notes to be issued on the Closing Date, when executed by the Trust and
authenticated by the Trustee in accordance with the Indenture, and
delivered to the Underwriters against payment therefor in accordance
with the terms hereof, will have been validly issued and delivered, and
will constitute valid and binding obligations of the Trust entitled to
the benefits of the Indenture and enforceable in accordance with their
terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, moratorium, fraudulent conveyance or other similar laws
relating to or affecting creditors' rights generally and court
decisions with respect thereto, and the Notes will conform in all
material respects to the description thereof in the Prospectus.
(g) Nelnet Funding is a limited liability company duly
organized, validly existing and in good standing under the laws of the
State of Delaware with full power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and as conducted on the date hereof, and is duly registered
and qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the conduct
of its business requires such registration or qualification, except
where the failure so to register or qualify does not have a material
adverse effect on the condition (financial or other), business,
prospects, properties, net worth or results of operations of Nelnet
Funding.
(h) Other than as contemplated by this Agreement or as
disclosed in the Prospectus, there is no broker, finder or other party
that is entitled to receive from Nelnet Funding or any of its
affiliates any brokerage or finder's fee or other fee or commission as
a result of any of the transactions contemplated by this Agreement.
(i) There are no legal or governmental proceedings pending or
threatened or, to the knowledge of Nelnet Funding contemplated, against
Nelnet Funding, or to which Nelnet Funding or any of its properties is
subject, that are not disclosed in the Prospectus and which, if
adversely decided, would individually or in the aggregate have a
material adverse effect on the condition (financial or other),
business, properties or results of operations of Nelnet Funding, or
would materially and adversely affect the ability of Nelnet Funding, or
the Trust to perform its obligations under this Agreement and the other
Basic Documents or otherwise materially affect the issuance of the
Notes or the consummation of the transactions contemplated hereby or by
the Basic Documents.
(j) Neither the offer, sale or delivery of the Notes by the
Trust nor the execution, delivery or performance of this Agreement or
the Basic Documents by Nelnet Funding or the Trust, nor the
consummation by Nelnet Funding or the Trust of the transactions
contemplated hereby or thereby (i) requires or will require any
consent, approval, authorization or other order of, or registration or
filing with, any court, regulatory body, administrative agency or other
governmental body, agency or official (except for compliance with the
securities or Blue Sky laws of various jurisdictions, the qualification
of the Indenture under the Trust Indenture Act and such other consents,
approvals or authorizations as shall have been obtained prior to the
Closing Date) or conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, the organizational
documents of Nelnet Funding or the Trust or (ii) conflicts or will
conflict with or constitutes or will constitute a breach of, or a
default under, in any material respect, any agreement, indenture, lease
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or other instrument to which Nelnet Funding or the Trust is a party or
by which Nelnet Funding or the Trust or any of its respective
properties may be bound, or violates or will violate in any material
respect any statute, law, regulation or filing or judgment, injunction,
order or decree applicable to Nelnet Funding or the Trust or any of its
respective properties, or will result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of Nelnet
Funding or the Trust pursuant to the terms of any agreement or
instrument to which it is a party or by which it may be bound or to
which any of its properties is subject other than as contemplated by
the Basic Documents.
(k) Nelnet Funding has all requisite power and authority to
execute, deliver and perform its obligations under this Agreement and
the other Basic Documents to which it is a party; the execution and
delivery of, and the performance by Nelnet Funding of its obligations
under, this Agreement and the other Basic Documents to which it is a
party have been duly and validly authorized by Nelnet Funding and this
Agreement and the other Basic Documents have been duly executed and
delivered by Nelnet Funding and constitute the valid and legally
binding agreements of Nelnet Funding, enforceable against Nelnet
Funding in accordance with their respective terms, except as the
enforcement hereof and thereof may be limited by bankruptcy,
insolvency, moratorium, fraudulent conveyance or other similar laws
relating to or affecting creditors' rights generally and court
decisions with respect thereto and subject to the applicability of
general principles of equity, and except as rights to indemnity and
contribution hereunder and thereunder may be limited by Federal or
state securities laws or principles of public policy.
(l) The statements set forth in the Prospectus under the
caption "Description of the Notes" insofar as they purport to
constitute a summary of the terms of the Notes, are accurate, complete
and fair.
(m) Nelnet Funding's assignment and delivery of Financed
Eligible Loans to the order of the Trustee on behalf of the Trust
pursuant to the Purchase Agreements will vest in the Trustee on behalf
of the Trust all of Nelnet Funding's right, title and interest therein,
subject to no prior lien, mortgage, security interest, pledge, adverse
claim, charge or other encumbrance.
(n) The Trust's assignment of the Financed Eligible Loans to
the Trustee pursuant to the Indenture will vest in the Trustee, for the
benefit of the Noteholders, a first priority perfected security
interest therein, subject to no prior lien, mortgage, security
interest, pledge, adverse claim, charge or other encumbrance.
(o) The Trust is not, nor as a result of the issuance and sale
of the Notes as contemplated hereunder will it become, subject to
registration as an "investment company" under the Investment Company
Act of 1940, as amended.
(p) The representations and warranties made by Nelnet Funding
in any Basic Document to which Nelnet Funding is a party and made in
any Officer's Certificate of Nelnet Funding or the Trust will be true
and correct at the time made and on and as of the Closing Date.
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(q) Since the date of the Prospectus, no material adverse
change or any development involving a prospective material adverse
change in, or affecting particularly the business or properties of,
Nelnet Funding has occurred.
4. Agreements of Nelnet Funding. Nelnet Funding agrees with each of the
Underwriters as follows:
(a) Nelnet Funding will prepare a supplement to the Prospectus
setting forth the amount of the Notes covered thereby and the terms
thereof not otherwise specified in the Prospectus, the price at which
the Notes are to be purchased by the Underwriters, either the initial
public offering price or the method by which the price at which the
Notes are to be sold will be determined, the selling concessions and
reallowances, if any, and such other information as the Underwriters
and Nelnet Funding deem appropriate in connection with the offering of
the Notes, and Nelnet Funding will timely file such supplement to the
Prospectus with the SEC pursuant to Rule 424(b) under the Act, but
Nelnet Funding will not file any amendments to the Registration
Statement as in effect with respect to the Notes or any amendments or
supplements to the Prospectus, unless it shall first have delivered
copies of such amendments or supplements to the Underwriters, with
reasonable opportunity to comment on such proposed amendment or
supplement or if the Underwriters or their counsel shall have
reasonably objected thereto promptly after receipt thereof; Nelnet
Funding will immediately advise the Underwriters or the Underwriters'
counsel (i) when notice is received from the SEC that any
post-effective amendment to the Registration Statement has become or
will become effective and (ii) of any order or communication suspending
or preventing, or threatening to suspend or prevent, the offer and sale
of the Notes or of any proceedings or examinations that may lead to
such an order or communication, whether by or of the SEC or any
authority administering any state securities or Blue Sky law, as soon
as Nelnet Funding is advised thereof, and will use its best efforts to
prevent the issuance of any such order or communication and to obtain
as soon as possible its lifting, if issued.
(b) If, at any time when the Prospectus relating to the Notes
is required to be delivered under the Act, any event occurs as a result
of which the Prospectus as then amended or supplemented would include
an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, or if it is necessary at any time to amend or
supplement the Prospectus to comply with the Act or the Rules and
Regulations, Nelnet Funding promptly will notify each of the
Underwriters of such event and will promptly prepare and file with the
SEC, at its own expense, an amendment or supplement to such Prospectus
that will correct such statement or omission or an amendment that will
effect such compliance. Neither the Underwriters' consent to, nor the
Underwriters' delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 7
hereof.
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(c) Nelnet Funding will immediately inform the Underwriters
(i) of the receipt by Nelnet Funding of any communication from the SEC
or any state securities authority concerning the offering or sale of
the Notes and (ii) of any threatened lawsuit or proceeding or of the
commencement of any lawsuit or proceeding to which Nelnet Funding is a
party relating to the offering or sale of the Notes.
(d) Nelnet Funding will furnish to the Underwriters, without
charge, copies of the Registration Statement (including all documents
and exhibits thereto or incorporated by reference therein), the
Prospectus, and all amendments and supplements to such documents
relating to the Notes, in each case as soon as reasonably available in
such quantities as the Underwriters may reasonably request.
(e) No amendment or supplement will be made to the
Registration Statement or Prospectus (i) prior to having furnished the
Underwriters with a copy of the proposed form of the amendment or
supplement and giving the Underwriters a reasonable opportunity to
review the same or (ii) in a manner to which the Underwriters or their
counsel shall reasonably object.
(f) Nelnet Funding will cooperate with the Underwriters and
with their counsel in connection with the qualification of, or
procurement of exemptions with respect to, the Notes for offering and
sale by the Underwriters and by dealers under the securities or Blue
Sky laws of such jurisdictions as the Underwriters may designate and
will file such consents to service of process or other documents
necessary or appropriate in order to effect such qualification or
exemptions; provided that in no event shall Nelnet Funding be obligated
to qualify to do business in any jurisdiction where it is not now so
qualified or to take any action which would subject it to service of
process in suits, other than those arising out of the offering or sale
of the Notes, in any jurisdiction where it is not now so subject.
(g) Nelnet Funding consents to the use, in accordance with the
securities or Blue Sky laws of such jurisdictions in which the Notes
are offered by the Underwriters and by dealers, of the Prospectus
furnished by Nelnet Funding.
(h) To the extent, if any, that the rating or ratings provided
with respect to the Notes by the rating agency or agencies that
initially rate the Notes is conditional upon the furnishing of
documents or the taking of any other actions by Nelnet Funding, Nelnet
Funding shall cause to be furnished such documents and such other
actions to be taken.
(i) So long as any of the Notes are outstanding, Nelnet
Funding will furnish to the Underwriters (i) as soon as available, a
copy of each document relating to the Notes required to be filed with
the SEC pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), or any order of the SEC thereunder, and (ii) such
other information concerning Nelnet Funding or the Trust as the
Underwriters may request from time to time.
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(j) If this Agreement shall terminate or shall be terminated
after execution and delivery pursuant to any provisions hereof
(otherwise than by notice given by the Underwriters terminating this
Agreement pursuant to Section 9 or Section 10 hereof) or if this
Agreement shall be terminated by the Underwriters because of any
failure or refusal on the part of Nelnet Funding to comply with the
terms or fulfill any of the conditions of this Agreement, Nelnet
Funding agrees to reimburse the Underwriters for all out-of-pocket
expenses (including fees and expenses of their counsel) reasonably
incurred by each of them in connection herewith, but without any
further obligation on the part of Nelnet Funding for loss of profits or
otherwise (except for the indemnity and contribution provisions of
Section 6 hereof).
(k) The net proceeds from the sale of the Notes hereunder will
be applied substantially in accordance with the description set forth
in the Prospectus.
(1) Except as stated in this Agreement and in the Prospectus,
Nelnet Funding has not taken, nor will it take, directly or indirectly,
any action designed to or that might reasonably be expected to cause or
result in stabilization or manipulation of the price of the Notes to
facilitate the sale or resale of the Notes.
(m) For a period from the date of this Agreement until the
retirement of the Notes, Nelnet Funding will deliver to you the annual
statements of compliance and the annual independent certified public
accountants' reports furnished to the Trustee pursuant to the Servicing
Agreement as soon as such statements and reports are furnished to the
Trustee.
(n) On or before the Closing Date, Nelnet Funding shall xxxx
its accounting and other records, if any, relating to the Financed
Eligible Loans and shall cause NELN and each Seller to xxxx their
respective computer records relating to the Financed Eligible Loans to
show the absolute ownership by the Trustee, as eligible lender of, and
the interest of the Trust in, the Financed Eligible Loans, and Nelnet
Funding shall not take, or shall permit any other person to take, any
action inconsistent with the ownership of, and the interest of the
Trust in, the Financed Eligible Loans, other than as permitted by the
Basic Documents.
(o) For the period beginning on the date of this Agreement and
ending 90 days hereafter, none of Nelnet Funding and any entity
affiliated, directly or indirectly, with Nelnet Funding will, without
the prior written notice to the Underwriters, offer to sell or sell
notes (other than the Notes) collateralized by FFELP Loans; provided,
however, that this shall not be construed to prevent the sale of FFELP
Loans by Nelnet Funding.
(p) If, at the time the Registration Statement became
effective, any information shall have been omitted therefrom in
reliance upon Rule 430A under the 1933 Act, then, immediately following
the execution of this Agreement, Nelnet Funding will prepare, and file
or transmit for filing with the Commission in accordance with such Rule
430A and Rule 424(b) under the 1933 Act, copies of an amended
Prospectus containing all information so omitted.
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(q) As soon as practicable, but not later than 16 months after
the date of this Agreement, Nelnet Funding will make generally
available to its securityholders an earnings statement covering a
period of at least 12 months beginning after the later of (i) the
effective date of the Registration Statement and (ii) the effective
date of the most recent post-effective amendment to the Registration
Statement to become effective prior to the date of this Agreement.
(r) Nelnet Funding will cooperate with the Underwriters in
listing and maintaining the Class A Notes on the Irish Stock Exchange.
5. Representations and Warranties of the Underwriters. Each of the
Underwriters, severally and not jointly, hereby represents and warrants to and
agrees with Nelnet Funding, severally and not jointly, that (A) it has not
offered or sold and will not offer or sell any Notes to persons in the United
Kingdom prior to the expiration of the period of six months from the issue date
of the Notes except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or agent)
for the purposes of their business or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1965, as
amended; (B) it has only communicated or caused to be communicated any
invitation or inducement to engage in investment activity (within the meaning of
section 21 if the Financial Services Markets Act 2000 (the "FSMA")), received by
it in connection with the issue or sale of the Notes in circumstances in which
section 21(1) of the FSMA does not apply to the Trust; and (C) it has complied,
and will comply, in all material respects, with all applicable provisions of the
FSMA with respect to anything done by it in relation to the Notes in, from or
otherwise involving the United Kingdom. Nelnet Funding represents and agrees
that it has been informed of the existence of the FSMA stabilizing guidance
contained in Section MAR 2, Xxx 2G of the FSMA Handbook (the Handbook of rules
and guidance issued by the Financial Services Authority).
6. Indemnification and Contribution. (a) Nelnet Funding agrees to
indemnify and hold harmless each of the Underwriters and each person, if any,
who controls an Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages, liabilities and expenses (or actions in respect thereof) arising out of
or based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, the Prospectus, or in any
amendment or supplement thereto, or any preliminary prospectus, or in the case
of the Registration Statement or in any amendment or supplement thereto, arising
out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading and in the case of the Prospectus or in any amendment or
supplement thereto, arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in light of the
circumstances under which they were made, and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such loss, claim, damage,
liability, or action as such expenses are incurred, except insofar as such
losses, claims, damages, liabilities or expenses arise out of or are based upon
any untrue statement or omission or alleged untrue statement or omission which
has been made therein or omitted therefrom in reliance upon and in conformity
with the information relating to an Underwriter furnished in writing to Nelnet
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Funding by such Underwriter expressly for use therein, it being understood that
the only such information furnished by any Underwriter consists of the
information described as such in Section 11 of this Agreement; provided,
however, that the indemnification contained in this paragraph (a) with respect
to any preliminary prospectus shall not inure to the benefit of an Underwriter
(or to the benefit of any person controlling an Underwriter) on account of any
such loss, claim, damage, liability or expense arising from the sale of the of
Notes by an Underwriter to any person if the untrue statement or alleged untrue
statement or omission or alleged omission of a material fact contained in such
preliminary prospectus was corrected in the final Prospectus and such
Underwriter sold Notes to that person without sending or giving at or prior to
the written confirmation of such sale, a copy of the final Prospectus (as then
amended or supplemented but excluding documents incorporated by reference
therein) if Nelnet Funding has previously furnished sufficient copies thereof to
such Underwriter at a time reasonably prior to the date such Notes are sold to
such person. The foregoing indemnity agreement shall be in addition to any
liability which Nelnet Funding may otherwise have.
(b) If any action, suit or proceeding shall be brought against
an Underwriter or any person controlling an Underwriter in respect of
which indemnity may be sought against Nelnet Funding, such Underwriter
or such controlling person shall promptly notify the parties against
whom indemnification is being sought (the "indemnifying parties"), but
the omission so to notify the indemnifying party will not relieve it
from any liability which it may have to any indemnified party under
Sections 6(a) and 6(c) hereof, except to the extent that the
indemnifying party is materially prejudiced by such omission, and in no
event shall the omission so to notify relieve Nelnet Funding from any
liability which it may otherwise have. In case any such action is
brought against any indemnified party and it notifies the indemnifying
party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish,
jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party,
be counsel to the indemnifying party). The applicable Underwriter or
any such controlling person shall have the right to employ separate
counsel in any such action, suit or proceeding and to participate in
the defense thereof, but the fees and expenses of such counsel shall be
at the expense of such Underwriter or such controlling person unless
(i) the indemnifying parties have agreed in writing to pay such fees
and expenses, (ii) the indemnifying parties have failed to assume the
defense and employ counsel, or (iii) the named parties to any such
action, suit or proceeding (including any impleaded parties) include
both the Underwriter or such controlling person and the indemnifying
parties and the Underwriter or such controlling person shall have been
advised by its counsel that there may be one or more legal defenses
available to it which are different from or additional to or in
conflict with those available to the indemnifying parties and in the
reasonable judgment of such counsel it is advisable for the Underwriter
11
or such controlling person to employ separate counsel (in which case
the indemnifying party shall not have the right to assume the defense
of such action, suit or proceeding on behalf of the Underwriter or such
controlling person). It is understood, however, that the indemnifying
parties shall, in connection with any one such action, suit or
proceeding or separate but substantially similar or related actions,
suits or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees
and expenses of only one separate firm of attorneys (in addition to any
local counsel) at any time for each Underwriter and controlling persons
not having actual or potential differing interests with such
Underwriter or among themselves, which firm shall be designated in
writing by such Underwriter, and that all such fees and expenses shall
be reimbursed on a monthly basis as provided in paragraph (a) hereof.
An indemnifying party will not, without the prior written consent of
the indemnified party, settle or compromise or consent to the entry of
any judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such
settlement, compromise or consent (i) includes an unconditional release
of each indemnified party from all liability arising out of such claim,
action, suit or proceeding and (ii) does not include a statement as to,
or an admission of fault, culpability or a failure to act by or on
behalf of an indemnified party.
(c) Each Underwriter, severally and not jointly, agrees to
indemnify and hold harmless Nelnet Funding and its directors and
officers, and any person who controls Nelnet Funding within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, to the same
extent as the indemnity from Nelnet Funding to the Underwriters set
forth in paragraph (a) hereof, but only with respect to information
relating to such Underwriter furnished in writing by such Underwriter
expressly for use in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary prospectus
therein, it being understood that the only such information furnished
by any Underwriter consists of the information described as such in
Section 11 of this Agreement. If any action, suit or proceeding shall
be brought against Nelnet Funding, any of its directors or officers, or
any such controlling person based on the Registration Statement, the
Prospectus, or any amendment or supplement thereto, or any related
preliminary prospectus therein and in respect of which indemnity may be
sought against an Underwriter pursuant to this paragraph (c), such
Underwriter shall have the rights and duties given to Nelnet Funding by
paragraph (b) above (except that if Nelnet Funding shall have assumed
the defense thereof the Underwriter shall have the option to assume
such defense but shall not be required to do so, but may employ
separate counsel therein and participate in the defense thereof, but
the fees and expenses of such counsel shall be at such Underwriter's
expense), and Nelnet Funding, its directors and officers, and any such
controlling person shall have the rights and duties given to the
Underwriters by paragraph (b) above. The foregoing indemnity agreement
shall be in addition to any liability which the Underwriters may
otherwise have.
(d) If the indemnification provided for in this Section 6 is
unavailable to or insufficient to hold harmless an indemnified party
under paragraphs (a) or (c) hereof in respect of any losses, claims,
damages, liabilities or expenses referred to therein, then an
indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages, liabilities or
expenses (i) in such proportion as is appropriate to reflect the
relative benefits received by Nelnet Funding on the one hand and the
applicable Underwriter on the other hand from the offering of the
Notes, or (ii) if the allocation provided by clause (i) above is not
12
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above
but also the relative fault of Nelnet Funding on the one hand and the
applicable Underwriter on the other in connection with the statements
or omissions that resulted in such losses, claims, damages, liabilities
or expenses, as well as any other relevant equitable considerations.
The relative benefits received by Nelnet Funding on the one hand and an
Underwriter on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering of the Notes (before
deducting expenses) received by the Trust bear to the total
underwriting discounts and commissions received by such Underwriter.
The relative fault of Nelnet Funding on the one hand and the
Underwriters on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material
fact relates to information supplied by Nelnet Funding on the one hand
or by an Underwriter on the other hand and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
(e) Nelnet Funding and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 6
were determined by a pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations
referred to in paragraph (d) above. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages,
liabilities and expenses referred to in paragraph (d) above shall be
deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party
in connection with investigating any claim or defending any such
action, suit or proceeding. Notwithstanding the provisions of this
Section 6, no Underwriter shall be required to contribute any amount in
excess of the amount by which the total underwriting discounts and
commissions received by such Underwriter with respect to the Notes
underwritten by such Underwriter exceed the sum of the amount of any
damages which such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or
alleged omission and the amount of any damages such Underwriter has
been required to pay under the Indemnity Agreement. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this paragraph (e) to contribute are several in
proportion to their respective underwriting obligations.
(f) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or
contribution under this Section 6 shall be paid by the indemnifying
party to the indemnified party as such losses, claims, damages,
liabilities or expenses are incurred. The indemnity and contribution
agreements contained in this Section 6 and the representations and
warranties of Nelnet Funding and the Underwriters set forth in this
Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of the
Underwriters, Nelnet Funding or any person controlling any of them or
their respective directors or officers, (ii) acceptance of any Notes
and payment therefor hereunder, and (iii) any termination of this
Agreement. A successor to the Underwriters, Nelnet Funding or any
person controlling any of them or their respective directors or
officers, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 6.
13
7. Conditions of the Underwriters' Obligations. The several obligations
of the Underwriters to purchase the Notes hereunder on the Closing Date are
subject to the following conditions precedent:
(a) All actions required to be taken and all filings required
to be made by Nelnet Funding under the Act prior to the sale of the
Notes shall have been duly taken or made. At and prior to the Closing
Date, no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose
shall have been instituted or, to the knowledge of Nelnet Funding or
the Underwriters, shall be contemplated by the Commission.
(b) Subsequent to the effective date of this Agreement, there
shall not have occurred (i) any change, or any development or event
involving a prospective change, in or affecting the condition
(financial or other), business, properties, net worth, or results of
operations of Nelnet Funding, NELN, the Sellers or Nelnet (A) not
contemplated by the Registration Statement, or (B) relating to the
matters described in the Prospectus under the heading "The Student Loan
Operations of Nelnet Student Loan Trust 2004-4 - Recent Developments",
which in the opinion of the Underwriters, would materially adversely
affect the market for the Notes, (ii) the withdrawal or any downgrading
in the long term counterparty rating of Nelnet below "BBB+" by S&P, or
any public announcement that such organization has under surveillance
or review its long term counterparty rating of Nelnet (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating), (iii) any
downgrading in the rating of any debt securities of trusts sponsored by
Nelnet Funding, NELN, the Sellers or Nelnet by any nationally
recognized statistical rating organization or any public announcement
that any such organization has under surveillance or review its rating
of any debt securities of trusts sponsored by Nelnet Funding, NELN, the
Sellers or Nelnet (other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
downgrading, of such rating), or (iv) any event or development which
makes any statement made in the Registration Statement or Prospectus
untrue or which, in the opinion of Nelnet Funding and its counsel or
the Underwriters and their counsel, requires the filing of any
amendment to or change in the Registration Statement or Prospectus in
order to state a material fact required by any law to be stated therein
or necessary in order to make the statements therein not misleading, if
amending or supplementing the Registration Statement or Prospectus to
reflect such event or development would, in the opinion of the
Underwriters, materially adversely affect the market for the Notes.
(c) You shall have received an opinion addressed to you of
Xxxxx Xxxx LLP, in its capacity as counsel to the Trust, dated the
Closing Date, in form and substance satisfactory to you and your
counsel with respect to the Nelnet Trust Purchase Agreement, the
Servicing Agreement, the Indenture, the Trust Eligible Lender
Agreement, the Administration Agreement, the Custodian Agreement and
this Agreement and to the validity of the Notes and such related
matters as you shall reasonably request. In addition, you shall have
received an opinion addressed to you of Xxxxx Xxxx LLP, in its capacity
as counsel for the Trust, in form and substance satisfactory to you and
your counsel, concerning "true sale," "non-consolidation" and "first
perfected security interest" and certain other issues with respect to
the transfer of the Financed Eligible Loans from the Sellers to Nelnet
Funding, from Nelnet Funding to the Trust and from the Trust to the
Trustee.
(d) You shall have received an opinion addressed to you of
Xxxxx Xxxx LLP, in its capacity as counsel for Nelnet Funding and the
Trust, dated the Closing Date, in form and substance satisfactory to
you and your counsel to the effect that the statements in the
14
Prospectus under the headings "Federal Income Tax Consequences" and
"ERISA Considerations", to the extent that they constitute statements
of matters of law or legal conclusions with respect thereto, have been
prepared or reviewed by such counsel and are correct in all material
respects.
(e) You shall have received an opinion addressed to you of
Xxxxx Xxxx LLP, in its capacity as counsel for Nelnet Funding and the
Trust, dated the Closing Date, in form and substance satisfactory to
you and your counsel with respect to the character of the Notes for
federal tax purposes.
(f) You shall have received an opinion addressed to you of
Stroock & Stroock & Xxxxx LLP, in its capacity as Underwriters'
Counsel, dated the Closing Date, in form and substance satisfactory to
you.
(g) You shall have received an opinion addressed to you of
Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx LLP, in its capacity as counsel for
Nelnet Funding and the Trust, dated the Closing Date in form and
substance satisfactory to you and your counsel with respect to the
Prospectus and the Registration Statement and certain matters arising
under the Act, the Trust Indenture Act of 1939, as amended, and the
Investment Company Act of 1940, as amended.
(h) You shall have received opinions addressed to you of
Perry, Guthery, Xxxxx & Xxxxxxxx, P.C. in their capacity as counsel to
NELN, as master servicer and administrator, Nelnet, Nelnet Funding and
each of the Sellers, each dated the Closing Date and satisfactory in
form and substance to you and your counsel, to the effect that:
(i) Each of NELN, Nelnet and each of the Sellers is a
corporation, and Nelnet Funding is a limited liability
company, in good standing under the laws of their respective
states of incorporation or organization; each having the full
power and authority (corporate and other) to own its
properties and conduct its business, as presently conducted by
it, and to enter into and perform its obligations under each
of the Basic Documents to which it is a party.
(ii) The Purchase Agreements have been duly
authorized, executed and delivered by the respective Seller,
as applicable, the Purchase Agreements, the Trust Agreement,
the Servicing Agreement, the Nelnet Funding Eligible Lender
Agreement and this Agreement have been duly authorized,
executed and delivered by Nelnet Funding, the Administration
Agreement, the Servicing Agreement and the Nelnet Subservicing
Agreement have been duly authorized, executed and delivered by
NELN and the Subservicing Agreement, the Indemnity Agreement
and the Custodian Agreement have been duly authorized,
executed and delivered by Nelnet and each such agreement is
the legal, valid and binding obligations of the respective
Seller, Nelnet Funding, NELN and Nelnet, as the case may be,
enforceable against each such Seller, Nelnet Funding, NELN and
Nelnet, as the case may be, in accordance with their
respective terms, except (x) the enforceability thereof may be
subject to bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect relating to
creditors' rights and (y) remedy of specific performance and
injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(iii) Neither the execution and delivery by NELN of
the Administration Agreement, the Servicing Agreement or the
Subservicing Agreement, or the execution and delivery by
Nelnet Funding of the Purchase Agreements, the Trust
Agreement, the Servicing Agreement, the Nelnet Funding
Eligible Lender Agreement or this Agreement, or the execution
by each Seller of the respective Purchase Agreement, or the
execution and delivery by Nelnet of the Subservicing
Agreement, the Indemnity Agreement or the Custodian Agreement,
nor the consummation by NELN, Nelnet Funding, each Seller or
Nelnet of the transactions contemplated therein nor the
15
fulfillment of the terms thereof by NELN, Nelnet Funding, each
Seller or Nelnet will conflict with, result in a breach,
violation or acceleration of, or constitute a default under,
any term or provision of the by-laws or limited liability
company agreement, as the case may be, of NELN, Nelnet
Funding, each Seller or Nelnet or of any indenture or other
agreement or instrument to which NELN, Nelnet Funding, any
Seller or Nelnet is a party or by which NELN, Nelnet Funding,
any Seller or Nelnet is bound, or result in a violation of or
contravene the terms of any statute, order or regulation
applicable to NELN, Nelnet Funding, any Seller or Nelnet of
any court, regulatory body, administrative agency or
governmental body having jurisdiction over NELN, Nelnet
Funding, any Seller or Nelnet.
(iv) There are no actions, proceedings or
investigations pending or, to the best of such counsel's
knowledge after due inquiry and reasonable investigation,
threatened against NELN, Nelnet Funding, any Seller or Nelnet
before or by any governmental authority that might materially
and adversely affect the performance by NELN, Nelnet Funding,
any Seller or Nelnet of its obligations under, or the validity
or enforceability of, any Basic Documents to which it is a
party.
(v) Nothing has come to such counsel's attention that
would lead such counsel to believe that the representations
and warranties of NELN contained in the Administration
Agreement, the Servicing Agreement or the Subservicing
Agreement, or the representations and warranties of Nelnet
Funding and the Sellers in the Purchase Agreements, the Trust
Agreement, the Servicing Agreement, the Nelnet Funding
Eligible Lender Trust Agreement or this Agreement, or the
representations and warranties of the Sellers contained in the
Purchase Agreements, or the representations and warranties of
Nelnet contained in the Subservicing Agreement, the Indemnity
Agreement or the Custodian Agreement are other than as stated
therein.
16
(vi) No authorization, approval, or other action by,
and no notice to or filing with, any governmental authority or
regulatory body is required (a) for the due execution,
delivery and performance by NELN of the Administration
Agreement, the Servicing Agreement or the Subservicing
Agreement, (b) for the due execution, delivery and performance
by Nelnet Funding of the Purchase Agreements, the Trust
Agreement, the Servicing Agreement, the Nelnet Funding
Eligible Lender Trust Agreement or this Agreement, (c) for the
due execution, delivery and performance by each Seller of the
respective Purchase Agreement, (d) for the due execution,
delivery and performance by Nelnet of the Subservicing
Agreement, the Indemnity Agreement or the Custodian Agreement
or (e) for the perfection of the Trust's and the Trustee's
interest in the Student Loans sold pursuant to the Purchase
Agreements or the exercise by the Trust (or its permitted
assigns) and the Trustee of their rights and remedies under
the Purchase Agreements, including specifically the filings of
any Uniform Commercial Code financing statements, except for
the execution and delivery of the Guarantee Agreements.
(vii) The Nelnet Funding Purchase Agreement together
with the related xxxx of sale and blanket endorsement effects
a valid sale to the Eligible Lender Trustee of the Student
Loans to be sold under the Nelnet Funding Purchase Agreement
enforceable against creditors of, and purchasers from, Nelnet
Funding.
(viii) As of the date specified in a schedule to such
opinion, there were no (a) UCC financing statements naming a
Seller as debtor or seller and covering any Student Loans to
be sold under the Purchase Agreements or interest therein or
(b) notices of the filing of any federal tax lien (filed
pursuant to Section 6323 of the Internal Revenue Code) or lien
of the Pension Benefit Guaranty Corporation (filed pursuant to
Section 4068 of ERISA) covering any Student Loan to be sold
under the Purchase Agreements or interest therein, listed in
the available records in the respective offices set forth in
such schedule opposite each such date (which are all of the
offices that are prescribed under either the internal law of
the conflict of law rules of the Delaware, Nebraska and Nevada
UCC as the offices in which filings should be made to perfect
security interests in Student Loans), except as set forth in
such schedule.
(ix) As of the date of such opinion, by executing the
Guarantee Agreements and upon execution and delivery of the
instruments of transfer described in the Purchase Agreements
and notification of the Guarantors and borrowers of the
transfer contemplated thereby, and assuming that the Eligible
Lender Trustee is an eligible lender as that term is defined
in 20 U.S.C. ss.1085(d)(1) of the Higher Education Act of
1965, as amended, the Eligible Lender Trustee on behalf of the
Trust will be entitled to the benefit of the applicable
Guarantor and/or Department of Education payments under the
Act related to the Student Loans sold under the Purchase
Agreements, subject to the terms and conditions of the
Guarantee Agreements and the Act.
17
(i) You shall have received opinions addressed to you of
Xxxxxxxx, Xxxxxx & Finger, P.A., in their capacity as counsel to the
Delaware Trustee, and as Delaware counsel to the Trust and Nelnet
Funding, dated the Closing Date and in form and substance satisfactory
to you and your counsel.
(j) You shall have received an opinion addressed to you of
counsel to the Trustee, dated the Closing Date and in form and
substance satisfactory to you and your counsel, to the effect that:
(i) The Trustee is a national banking association
duly organized and validly existing under the laws of the
United States of America.
(ii) The Trustee has the full corporate trust power
to accept the office of indenture trustee under the Indenture
and to enter into and perform its obligations under the
Indenture, the Custodian Agreement, the Eligible Lender
Agreements, the Administration Agreement, the Investment
Agreements and each Guarantee Agreement.
(iii) The execution and delivery of each of the
Indenture, the Custodian Agreement, the Eligible Lender
Agreements, the Administration Agreement, the Investment
Agreements and each Guarantee Agreement, and the performance
by the Trustee of its obligations under the Indenture, the
Custodian Agreement, the Administration Agreement, the
Eligible Lender Agreements, the Investment Agreements and each
Guarantee Agreement, have been duly authorized by all
necessary action of the Trustee and each has been duly
executed and delivered by the Trustee.
(iv) The Indenture, the Custodian Agreement, the
Eligible Lender Agreements, the Administration Agreement, the
Investment Agreements and each Guarantee Agreement constitute
valid and binding obligations of the Trustee enforceable
against the Trustee.
(v) The execution and delivery by the Trustee of the
Indenture, the Custodian Agreement, the Eligible Lender
Agreements, the Administration Agreement, the Investment
Agreements and each Guarantee Agreement do not require any
consent, approval or authorization of, or any registration or
filing with, any state or United States Federal governmental
authority.
(vi) Each of the Notes has been duly authenticated by
the Trustee.
(vii) Neither the consummation by the Trustee of the
transactions contemplated in the Indenture, the Custodian
Agreement, the Eligible Lender Agreements, the Administration
Agreement, the Investment Agreements and each Guarantee
Agreement nor the fulfillment of the terms thereof by the
Trustee will conflict with, result in a breach or violation
of, or constitute a default under any law or the charter,
by-laws or other organizational documents of the Trustee or
the terms of any indenture or other agreement or instrument
known to such counsel and to which the Trustee or any of its
subsidiaries is a party or is bound or any judgment, order or
decree known to such counsel to be applicable to the Trustee
or any of its subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over the Trustee or any of its subsidiaries.
18
(viii) There are no actions, suits or proceedings
pending or, to the best of such counsel's knowledge after due
inquiry, threatened against the Trustee (as indenture trustee
under the Indenture or in its individual capacity) before or
by any governmental authority that might materially and
adversely affect the performance by the Trustee of its
obligations under, or the validity or enforceability of, the
Indenture, the Custodian Agreement, the Eligible Lender
Agreements, the Administration Agreement, the Investment
Agreements or any Guarantee Agreement.
(ix) The execution, delivery and performance by the
Trustee of the Indenture, the Custodian Agreement, the
Eligible Lender Agreements, the Administration Agreement, the
Investment Agreements or any Guarantee Agreement will not
subject any of the property or assets of the Trust or any
portion thereof, to any lien created by or arising under the
Indenture that is unrelated to the transactions contemplated
in such agreements.
(x) The Trustee is an "eligible lender" for purposes
of the FFELP Program in its capacity as trustee with respect
to Financed Eligible Loans held under the Indenture.
(k) You shall have received certificates addressed to you
dated the Closing Date of any one of the Chairman of the Board, the
President, any Executive Vice President, Senior Vice President or Vice
President, the Treasurer, any Assistant Treasurer, the principal
financial officer or the principal accounting officer of Nelnet
Funding, each Seller, Nelnet and NELN in which such officers shall
state that, to the best of their knowledge after reasonable
investigation, (i) the representations and warranties of Nelnet
Funding, such Seller, Nelnet or NELN, as the case may be, contained in
the respective Basic Documents to which it is a party, as applicable,
are true and correct in all material respects, that each of Nelnet
Funding, such Seller, Nelnet and NELN has complied with all agreements
and satisfied all conditions on its part to be performed or satisfied
under such agreements at or prior to the Closing Date, (ii) that they
have reviewed the Prospectus and that the information therein regarding
Nelnet Funding, such Seller, Nelnet or NELN, as applicable, is fair and
accurate in all material respects, and (iii) since the date set forth
in such certificate, except as may be disclosed in the Prospectus, no
material adverse change or any development involving a prospective
material adverse change, in or affecting particularly the business or
properties of Nelnet Funding, such Seller, Nelnet or NELN, as
applicable, has occurred.
19
(l) You shall have received evidence satisfactory to you that,
on or before the Closing Date, UCC-1 financing statements have been or
are being filed in the office of the Secretary of State of the State of
Delaware reflecting the grant of the security interest by the Trust in
the Financed Eligible Loans and the proceeds thereof to the Trustee.
(m) You shall have received a certificate addressed to you
dated the Closing Date from a responsible officer acceptable to you of
the Trustee in form and substance satisfactory to you and your counsel
and to which shall be attached each Guarantee Agreement.
(n) The Underwriters shall have received on the Closing Date
from KPMG LLP a letter dated the Closing Date, and in form and
substance satisfactory to the Underwriters, to the effect that they
have carried out certain specified procedures, not constituting an
audit, with respect to certain information regarding the Financed
Eligible Loans and setting forth the results of such specified
procedures.
(o) All the representations and warranties of Nelnet Funding
and the Trust contained in this Agreement and the Basic Documents shall
be true and correct in all material respects on and as of the date
hereof and on and as of the Closing Date as if made on and as of the
Closing Date and the Underwriters shall have received a certificate,
dated the Closing Date and signed by an executive officer of Nelnet
Funding to the effect set forth in this Section 7(o) and in Section
7(p) hereof.
(p) Neither Nelnet Funding nor the Trust shall have failed at
or prior to the Closing Date to have performed or complied with any of
its agreements herein contained and required to be performed or
complied with by it hereunder at or prior to the Closing Date.
(q) The Underwriters shall have received by instrument dated
the Closing Date (at the option of the Underwriters), in lieu of or in
addition to the legal opinions referred to in this Section 7, the right
to rely on opinions provided by such counsel and all other counsel
under the terms of the Basic Documents.
(r) Each class of Class A Notes shall be rated "AAA", "AAA"
and "Aaa", respectively, by Fitch, Inc. ("Fitch"), Standard & Poor's
Ratings Service, a division of The XxXxxx-Xxxx Companies ("S&P"), and
Xxxxx'x Investors Service, Inc. ("Moody's"), the Class B Notes shall be
rated "AA+", "AA" and "Aal", or higher, by Fitch, S&P and Moody's,
respectively, and that neither Fitch, S&P nor Moody's have placed the
Notes under surveillance or review with possible negative implications.
(s) You shall have received evidence satisfactory to you of
the completion of all actions necessary to effect the transfer of the
Financed Eligible Loans as described in the Prospectus and the
recordation thereof on each Sellers' and NELN's computer systems.
(t) You shall have received certificates addressed to you
dated the Closing Date from officers of Nelnet Funding and legal
opinions addressing such additional matters as you may reasonably
request in form and substance satisfactory to you and your counsel.
20
(u) You shall have received a signed Indemnity Agreement from
Nelnet in form and substance satisfactory to you and your counsel.
(v) You shall have received certificates dated the Closing
Date of United Student Aid Funds, Inc., California Student Aid
Commission and Pennsylvania Higher Education Assistance Agency to the
effect that the information in the Prospectus with respect to such
entity is true and correct and is fair and accurate in all material
respects.
(w) On the Closing Date, the aggregate principal amount of the
Notes, as specified in Schedule A to this Agreement, shall have been
sold by the Trust to the Underwriters and the Underwriters shall have
received from Nelnet payment of all discounts and commissions in
connection with the underwriting of the Notes as provided for in the
Indemnity Agreement.
(x) You shall have received opinions of counsel to any
provider of an investment agreement, guaranteed investment contract, or
other similar agreement, in form and substance satisfactory to you and
your counsel, relating to corporate and securities matters with respect
to such arrangement and its provider.
(y) You shall have received such other opinions, certificates
and documents as are required under the Indenture as a condition to the
issuance of the Notes.
Nelnet Funding will provide or cause to be provided to you such
conformed copies of such of the foregoing opinions, notes, letters and documents
as you reasonably request.
8. Expenses. Nelnet Funding agrees to pay or to otherwise cause the
payment of the following costs and expenses and all other costs and expenses
incident to the performance by it of its obligations hereunder: (i) the
preparation, printing or reproduction of the Registration Statement, the
Prospectus, any preliminary prospectus and each amendment or supplement to any
of them, this Agreement, and each other Basic Document; (ii) the printing (or
reproduction) and delivery (including postage, air freight charges and charges
for counting and packaging) of such copies of the Registration Statement, the
Prospectus, any preliminary prospectus and all amendments or supplements to, and
preliminary versions of, any of them as may be reasonably requested for use in
connection with the offering and sale of the Notes; (iii) the preparation,
printing, authentication, issuance and delivery of definitive certificates for
the Notes; (iv) the printing (or reproduction) and delivery of this Agreement,
the preliminary and supplemental Blue Sky Memoranda and all other agreements or
documents printed (or reproduced) and delivered in connection with the offering
of the Notes; (v) qualification of the Indenture under the Trust Indenture Act;
(vi) the qualification of the Notes for offer and sale under the securities or
Blue Sky laws of the several states as provided in Section 3(h) hereof
(including the reasonable fees, expenses and disbursements of counsel relating
to the preparation, printing or reproduction, and delivery of the preliminary
and supplemental Blue Sky Memoranda and such qualification); (vii) the fees and
disbursements of (A) the Trust's counsel, (B) the Underwriters' counsel, (C) the
Trustee and its counsel, (D) the Delaware Trustee and its counsel, (E) the
Depository Trust Company in connection with the book-entry registration of the
Notes, (F) the SEC and (G) KPMG LLP, accountants for the Trust and issuer of the
Comfort Letter; (viii) obtaining any investment agreement, guaranteed investment
contract or other similar arrangement; and (ix) the fees charged by S&P, Fitch
and Xxxxx'x for rating the Notes.
21
9. Effective Date of Agreement. This Agreement shall be deemed
effective as of the date first above written upon the execution and delivery
hereof by all the parties hereto. Until such time as this Agreement shall have
become effective, it may be terminated by Nelnet Funding, by notifying each of
the Underwriters, or by the Underwriters, by notifying Nelnet Funding.
Any notice under this Section 9 may be given by telecopy or telephone
but shall be subsequently confirmed by letter.
10. Termination of Agreement. This Agreement shall be subject to
termination in the absolute discretion of the Underwriters, without liability on
the part of the Underwriters to Nelnet Funding, by notice to Nelnet Funding, if
prior to the Closing Date (i) trading in securities generally on the New York
Stock Exchange, American Stock Exchange or the Nasdaq National Market shall have
been suspended or materially limited, (ii) a general moratorium on commercial
banking activities in New York shall have been declared by either Federal or
state authorities, or (iii) there shall have occurred any outbreak or escalation
of hostilities or other international or domestic calamity, crisis or change in
political, financial or economic conditions, the effect of which is such as to
make it, in the judgment of the Underwriters, impracticable or inadvisable to
commence or continue the offering of the Notes on the terms set forth in the
Prospectus, as applicable, or to enforce contracts for the resale of the Notes
by the Underwriters. Notice of such termination may be given to Nelnet Funding
by telecopy or telephone and shall be subsequently confirmed by letter.
11. Information Furnished by the Underwriters. The statements set forth
in the second, fourth and tenth paragraphs and each table under the heading
"Plan of Distribution" in the Prospectus Supplement constitute the only
information furnished by or on behalf of the Underwriters as such information is
referred to in Sections 3(b) and 6 hereof.
12. Default by One of the Underwriters. If any of the Underwriters
shall fail on the Closing Date to purchase the Notes which it is obligated to
purchase hereunder (the "Defaulted Notes"), the remaining Underwriters which are
obligated to purchase that class of Notes (the "Non-Defaulting Underwriters")
shall have the right, but not the obligation, within one (1) Business Day
thereafter, to make arrangements to purchase all, but not less than all, of the
remaining Defaulted Notes of such class upon the terms herein set forth; if,
however, any such Non-Defaulting Underwriters shall have not completed such
arrangements within such one (1) Business Day period, then this Agreement shall
terminate without liability on the part of any such Non-Defaulting Underwriter.
22
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, either the Non-Defaulting Underwriters or Nelnet Funding
shall have the right to postpone the Closing Date for a period not exceeding
seven days in order to effect any required changes in the Registration Statement
or Prospectus or in any other documents or arrangements.
13. Survival of Representations and Warranties. The respective
indemnities, agreements, representations, warranties and other statements of
Nelnet Funding or its officers and of the Underwriters set forth in or made
pursuant to this Agreement or contained in notes of officers of Nelnet Funding
submitted pursuant hereto shall remain operative and in full force and effect,
regardless of any investigation or statement as to the results thereof, made by
or on behalf of the Underwriters, Nelnet Funding or any of their respective
representatives, officers or directors or any controlling person, and will
survive (i) delivery of and payment for the Notes or (ii) termination of this
Agreement.
14. Miscellaneous. Except as otherwise provided in Sections 6, 9 and 10
hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to Nelnet Funding, at 000 Xxxxx 00xx
Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxx X. Xxxxxx, and (ii)
if to the Underwriters, to the address of the respective Underwriter set forth
above with a copy to Stroock & Stroock & Xxxxx LLP, 000 Xxxxxx Xxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Xxxxxxx X. Xxxxx.
This Agreement has been and is made solely for the benefit of the
Underwriters, Nelnet Funding, the Trust, their respective directors, officers,
managers, trustees and controlling persons referred to in Section 6 hereof and
their respective successors and assigns, to the extent provided herein, and no
other person shall acquire or have any right under or by virtue of this
Agreement. Neither the term "successor" nor the term "successors and assigns" as
used in this Agreement shall include a purchaser from an Underwriter of any of
the Notes in his status as such purchaser.
15. Applicable Law, Counterparts. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York (including
Section 5-1401 of the General Obligations Law, but otherwise without giving
effect to the choice of laws or conflict of laws principles thereof).
Nelnet Funding hereby submits to the non-exclusive jurisdiction of the
federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof or
thereof shall have been executed and delivered on behalf of each party hereto.
23
Please confirm that the foregoing correctly sets forth the agreement
between the Nelnet Funding and the Underwriters.
Very truly yours,
NELNET STUDENT LOAN FUNDING, LLC
By: Nelnet Student Loan Management
Corporation, as Manager and Special Member
By: /s/ Xxxxxxx X. Xxxxxxxxx
-------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President
Confirmed as of the date first
above mentioned.
CITIGROUP GLOBAL MARKETS INC.
By: /s/ Xxxx Xxxxx
-------------------------------
Name: Xxxx Xxxxx
Title:
X.X. XXXXXX SECURITIES INC.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
XXXXXX XXXXXXX & CO. INCORPORATED
By: /s/ Xxxxx Xxxx
-------------------------------
Name: Xxxxx Xxxx
Title: Managing Director
24
SCHEDULE A
----------- ---------------- ---------------- ------------------ ---------------
Citigroup Global X.X. Xxxxxx Xxxxxx Xxxxxxx
Notes Markets Inc. Securities Inc. & Co. Incorporated TOTAL
----------- ---------------- ---------------- ------------------ ---------------
Class A-1 $126,670,000 $126,660,000 $126,670,000 $ 380,000,000
----------- ---------------- ---------------- ------------------ ---------------
Class A-2 $172,000,000 $172,000,000 $172,000,000 $ 516,000,000
----------- ---------------- ---------------- ------------------ ---------------
Class A-3 $ 98,000,000 $ 98,000,000 $ 98,000,000 $ 294,000,000
----------- ---------------- ---------------- ------------------ ---------------
Class A-4 $104,420,000 $104,410,000 $104,420,000 $ 313,250,000
----------- ---------------- ---------------- ------------------ ---------------
Class A-5 $152,330,000 $152,340,000 $152,330,000 $ 457,000,000
----------- ---------------- ---------------- ------------------ ---------------
Class B $ 20,212,000 $ 20,202,000 $ 20,212,000 $ 60,626,000
----------- ---------------- ---------------- ------------------ ---------------
Total $673,632,000 $673,612,000 $673,632,000 $2,020,876,000
----------- ---------------- ---------------- ------------------ ---------------
25
SCHEDULE B
TERMS OF THE NOTES
------------ -------------------------- ------------------- --------------- --------------------- ------------------
Class Interest Rate Final Maturity Date Price to Public Underwriting Discount Proceeds to Issuer
------------ -------------------------- ------------------- --------------- --------------------- ------------------
2004-4 A-1 3-month LIBOR minus 0.01% April 25, 2011 100% 0.16% $380,000,000
------------ -------------------------- ------------------- --------------- --------------------- ------------------
2004-4 A-2 3-month LIBOR plus 0.02% April 26, 2016 100% 0.18% $516,000,000
------------ -------------------------- ------------------- --------------- --------------------- ------------------
2004-4 A-3 3-month LIBOR plus 0.09% October 25, 2016 100% 0.20% $294,000,000
------------ -------------------------- ------------------- --------------- --------------------- ------------------
2004-4 A-4 3-month LIBOR plus 0.13% April 26, 2021 100% 0.23% $313,250,000
------------ -------------------------- ------------------- --------------- --------------------- ------------------
2004-4 A-5 3-month LIBOR plus 0.16% January 26, 2037 100% 0.26% $457,000,000
------------ -------------------------- ------------------- --------------- --------------------- ------------------
2004-4 B 3-month LIBOR plus 0.30% January 25, 2041 100% 0.33% $ 60,626,000
------------ -------------------------- ------------------- --------------- --------------------- ------------------
TOTAL $2,020,876,000
------------ -------------------------- ------------------- --------------- --------------------- ------------------
26
