Exhibit 10.18
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT dated effective as of January
24, 2003 (the "FIRST AMENDMENT" or this "AMENDMENT") is among NELNET LOAN
SERVICES, INC., a corporation duly organized and validly existing under the laws
of the State of Nebraska ("NLSI"), NELNET, INC., a corporation duly organized
and validly existing under the laws of the State of Nevada ("NELNET" and NLSI,
herein each individually a "BORROWER" and collectively "BORROWERS"), and BANK OF
AMERICA, N.A., a national banking association ("BANK").
PRELIMINARY STATEMENT
(1) Pursuant to that certain Credit Agreement dated as of January
11, 2002, among Borrowers and Bank, Bank made a revolving credit facility
available to Borrowers upon the terms and conditions set forth therein (the
"CREDIT AGREEMENT").
(2) Borrowers have requested that the Credit Agreement be renewed,
amended, and extended, and Bank has agreed to renew, extend, and amend the
Credit Agreement to the extent and in the manner set forth herein.
Accordingly, in consideration of the foregoing and the mutual covenants
set forth herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINED TERMS. All capitalized terms defined in the
Credit Agreement, and not otherwise defined herein shall have the same meanings
herein as in the Credit Agreement. Upon the effectiveness of this Amendment,
each reference (a) in the Credit Agreement to "this Agreement," "hereunder,"
"herein" or words of like import shall mean and be a reference to the Credit
Agreement, as amended hereby, (b) in the Note and the other Loan Documents to
the Credit Agreement shall mean and be a reference to the Credit Agreement, as
amended hereby, and (c) in the Loan Documents to any term defined by reference
to the Credit Agreement shall mean and be a reference to such term as defined in
the Credit Agreement, as amended hereby.
SECTION 1.02 REFERENCES, ETC. The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Amendment shall refer
to this Amendment as a whole and not to any particular provision of this
Amendment. In this Amendment, unless a clear contrary intention appears the word
"including" (and with correlative meaning "include") means including, without
limiting the generality of any description preceding such term. No provision of
this Amendment shall be interpreted or constructed against any Person solely
because that Person or its legal representative drafted such provision.
FIRST AMENDMENT
ARTICLE II
AMENDMENTS TO CREDIT AGREEMENT
SECTION 2.01 AMENDMENTS TO SECTION 1.1.
(a) SECTION 1.1 of the Credit Agreement is hereby amended by
deleting the definitions of "Advance Termination Date," "Fixed
Charges," "Maturity Date," and "Permitted Debt" and substituting the
following definitions in lieu thereof:
"ADVANCE TERMINATION DATE" means January 23, 2004.
"FIXED CHARGES" means, for any period, the sum of following
calculated for Borrowers and their respective Subsidiaries on
a consolidated basis without duplication: (i) pro forma
interest expense relating to Permitted Debt; plus (ii)
Commercial Paper Debt and that portion of the long term Debt
that should be classified as current in accordance with GAAP
as of the first day of such period but excluding, to the
extent included, the outstanding principal amount of Permitted
Debt and any Debt to be assumed in connection with a Proposed
Acquisition; plus (iii) (a) .25 multiplied by (b) the sum of
(1) the principal amount of the Permitted Debt outstanding on
the date of determination (which has not been included in (ii)
above) plus (2) the amount of the Loan requested plus (3) the
principal amount of the Debt to be assumed in connection with
a Proposed Acquisition. Pro forma interest expense shall be
determined in good faith by a financial officer of Borrower
and when calculating pro forma interest expense with respect
to any Debt bearing interest at a floating rate, the interest
expense on such Debt shall be calculated at the average
interest rate applicable to the Loans in the immediately
preceding fiscal quarter for the entire period and as if the
accrued interest thereon is payable as of the end of each
fiscal quarter.
"MATURITY DATE" means January 23, 2005.
"PERMITTED DEBT" means Debt described in Section 8.1(a), (b),
(i), (j), (k) and (l) and the SLIMS.
(b) SECTION 1.1 is hereby amended by adding the following
definition thereto:
"COMMERCIAL PAPER DEBT" means up to (a) $50,000,000 aggregate
principal amount or such other amount as agreed upon in
writing by Borrowers and the Bank of unsecured commercial
paper issued by either or both Borrowers, and (b) any loan
facility on terms and conditions reasonably acceptable to Bank
whose sole use of proceeds is to fund, when due, any payment
of commercial paper.
FIRST AMENDMENT
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SECTION 2.02 AMENDMENT TO SECTION 2.3(a). SECTION 2.3(a) of the
Credit Agreement is hereby deleted and the following new SECTION 2.3(a) is
substituted in lieu thereof:
(a) Three (3) quarterly principal installments due and
payable on March 31, 2004, June 30, 2004 and September 30,
2004, each installment in an aggregate principal amount equal
to the quotient obtained by dividing the aggregate principal
amount of the Loans outstanding on the Advance Termination
Date by sixteen (16); and
SECTION 2.03 AMENDMENT TO SECTION 2.4(a). SECTION 2.4(a) of the
Credit Agreement is hereby deleted and the following new SECTION 2.4(a) is
substituted in lieu thereof:
(a) Interest Rate. Borrowers shall, jointly and
severally, pay to the Bank interest on the unpaid principal
amount outstanding hereunder, at a fluctuating rate per annum
equal to the Applicable Rate. The term "APPLICABLE RATE"
means: (i) with respect to each Base Rate Loan, the Base Rate;
(ii) with respect to each Libor Loan, the Adjusted Libor Rate
plus (A) prior to the Advance Termination Date, two and one
quarter percent (2.25%), and (B) on or after the Advance
Termination Date, two and one half percent (2.50%).
SECTION 2.04 AMENDMENTS TO SECTION 8.1.
(a) SECTION 8.1(j) of the Credit agreement is hereby
amended by deleting the word "and" at the end thereof.
(b) SECTION 8.1(k) of the Credit Agreement is hereby
amended by deleting "." from the end thereof and substituting "; and" in lieu
thereof.
(c) SECTION 8.1 of the Credit Agreement is hereby amended
by adding the following new SECTION 8.1(l) thereto:
(l) Commercial Paper Debt.
SECTION 2.05 AMENDMENT TO ARTICLE VIII. ARTICLE VIII of the Credit
Agreement is hereby amended by adding the following new Section thereto:
Section 8.12. Student Loan Servicing Rights. NLSI
shall not sell, transfer, or otherwise dispose of any
of its rights to service Student Loans pursuant to
the Servicing Contracts (as defined in the Security
Agreement) nor shall any other Subsidiary of NELNET
or NLSI begin servicing any Student Loans without the
prior written consent of Bank and delivery to Bank of
a pledge agreement, in form and substance
satisfactory to Bank, by the new servicer of such
Student Loans securing payment to Bank of the
Obligations.
FIRST AMENDMENT
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SECTION 2.06 AMENDMENT TO SECTION 10.1. SECTION 10.1 of the Credit
Agreement is hereby amended by deleting SECTION 10.1(o) therefrom in its
entirety.
ARTICLE III
CONDITIONS TO EFFECTIVENESS
SECTION 3.01 CONDITIONS TO EFFECTIVENESS. This Amendment shall
become effective upon receipt by Bank of the following, each in form and
substance satisfactory to Bank and in such number of counterparts as may be
reasonably requested by Bank:
(a) This Amendment duly executed by Borrowers, Bank, and
each Guarantor (as defined in the Guaranty).
(b) Borrower shall have paid to Bank a renewal and
amendment fee equal to $30,000.
(c) A certificate of incumbency for each Borrower
certified by its Secretary or an Assistant Secretary certifying (i) the
name of each of its officers who is authorized to sign this Amendment,
and (ii) a true and correct copy of the Resolutions of the Board of
Directors of each Borrower which authorize its execution and delivery
of this Amendment, and the performance of the Loan Documents as amended
hereby.
(d) A Subsidiary Joinder Agreement executed by each
Regular Subsidiary that is not a Guarantor (as defined in the Guaranty)
under the Guaranty.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
In order to induce Bank to enter into this Amendment, Borrowers hereby
represent and warrant to Bank as follows:
SECTION 4.01 CREDIT AGREEMENT. After giving effect to the
execution and delivery of this Amendment and the consummation of the
transactions contemplated hereby, and with this Amendment constituting one of
the Loan Documents, the representations and warranties set forth in Article VI
of the Credit Agreement are true and correct on the date hereof as though made
on and as of such date.
SECTION 4.02 NO DEFAULT. After giving effect to the execution and
delivery of this Amendment and the consummation of the transactions contemplated
hereby, no Default or Event of Default has occurred and is continuing as of the
date hereof.
ARTICLE V
MISCELLANEOUS
SECTION 5.01 AFFIRMATION OF LOAN DOCUMENTS. Borrowers hereby
acknowledge and agree that all of their obligations under the Credit Agreement,
as amended hereby, and the other Loan Documents, including but not limited to
the obligations of NLSI under the Security Agreement, shall remain in full force
and effect following the execution and delivery of this Amendment, and such
obligations are hereby affirmed, ratified, and confirmed by Borrowers.
SECTION 5.02 COSTS AND EXPENSES. Borrowers agree to pay on demand
all costs and expenses incurred by Bank in connection with the preparation,
execution, delivery, filing, administration, and recording of this Amendment and
any other agreements delivered in connection with or pursuant to this
FIRST AMENDMENT
4
Amendment, including, without limitation, the fees and out-of-pocket expenses
of Xxxxxx and Xxxxx, LLP, counsel to Bank.
SECTION 5.03 SUCCESSORS AND ASSIGNS. This Amendment shall be
binding upon and inure to the benefit of the Borrowers and Bank and their
respective successors and assigns.
SECTION 5.04 CAPTIONS. The captions in this Amendment have been
inserted for convenience only and shall be given no substantive meaning or
significance whatsoever in construing the terms and provisions of this
Amendment.
SECTION 5.05 COUNTERPARTS. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered either in original, facsimile or
electronic form, shall be deemed to be an original but all of which taken
together shall constitute but one and the same instrument.
SECTION 5.06 GOVERNING LAW. This Amendment shall be governed by,
and construed in accordance with, the laws of the State of Texas.
SECTION 5.07 FINAL AGREEMENT OF THE PARTIES. THE CREDIT AGREEMENT
(INCLUDING THE EXHIBITS THERETO), AS AMENDED BY THIS AMENDMENT, THE NOTE, AND
THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES.
[Remainder of Page Intentionally Left Blank; Signatures Begin on Next Page]
FIRST AMENDMENT
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the date
first above written.
BORROWERS
NELNET LOAN SERVICES, INC.
NELNET, INC.
BY: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx, Chief Financial Officer
SIGNATURE PAGE TO THE FIRST AMENDMENT
BANK OF AMERICA, N. A.,
as Bank
BY: /s/ Xxxxxx X. Xxxxxx
------------------------------------------
Xxxxxx X. Xxxxxx, Principal
SIGNATURE PAGE TO THE FIRST AMENDMENT
CONSENT OF GUARANTORS
To induce Bank to enter into this Amendment, the undersigned jointly and
severally (a) consent and agree to the execution and delivery of the Amendment,
(b) ratify and confirm that all guaranties, assurances, and liens granted,
conveyed, or assigned to Bank under the Loan Documents are not released,
diminished, impaired, reduced, or otherwise adversely affected by this Amendment
and continue to guarantee, assure, and secure the full payment and performance
of all present and future Obligations.
GUARANTORS:
NELNET LOAN SERVICES, INC.
NELNET, INC.
NELNET GUARANTEE SERVICES, INC.
GUARANTEC, LLP
NELNET MARKETING SOLUTIONS, INC.
CLASSCREDIT, INC.
INTUITION, INC.
NHELP, INC.
NATIONAL HIGHER EDUCATION
LOAN PROGRAM, INC.
EFS, INC.
EFS FINANCE COMPANY
EFS SERVICES INC.
By: /s/ Xxxxx X. Xxxxxx
------------------------------------------
Xxxxx X. Xxxxxx
Name:-------------------------------------
Authorized Officer of each Guarantor
GUARANTOR CONSENT
SUBSIDIARY JOINDER AGREEMENT
This SUBSIDIARY JOINDER AGREEMENT (the "AGREEMENT") dated as of
January 24, 2003 is executed by the undersigned (the "OBLIGATED PARTY") for the
benefit of BANK OF AMERICA, N.A., as agent for itself and the other Secured
Parties in connection with that certain Credit Agreement dated January 11, 2002,
among NELNET LOAN SERVICES, INC., NELNET, INC. (together the "BORROWERS") and
BANK OF AMERICA, N.A. (the "BANK") (as modified, the "CREDIT AGREEMENT", and
capitalized terms not otherwise defined herein being used herein as defined in
the Credit Agreement).
The Obligated Party is a newly formed or newly acquired Subsidiary (but
not a Special Purpose Vehicle) and is required to execute this Agreement
pursuant to the Credit Agreement.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Obligated Party hereby agrees as follows:
1. The Obligated Party hereby assumes all the obligations of a
"GUARANTOR" under the Guaranty and agrees that it is a "GUARANTOR" and is bound
as a "GUARANTOR" under the terms of the Guaranty as if it had been an original
signatory thereto. In accordance with the forgoing and for valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
Obligated Party irrevocably and unconditionally guarantees to the Agent and the
Secured Parties the full and prompt payment and performance of the Guaranteed
Indebtedness (as defined in the Guaranty) upon the terms and conditions set
forth in the Guaranty.
2. This Agreement shall be deemed to be part of, and a
modification to, the Guaranty and shall be governed by all the terms and
provisions of the Guaranty, which terms are incorporated herein by reference,
are ratified and confirmed and shall continue in full force and effect as valid
and binding agreements of Obligated Party enforceable against Obligated Party.
The Obligated Party hereby waives notice of the Agent's or any Secured Party's
acceptance of this Agreement.
IN WITNESS WHEREOF, the Obligated Party has executed this Agreement as
of the day and year first written above.
Obligated Party:
STUDENT PARTNER SERVICES, INC., a
Nebraska corporation
By: /s/ Xxxxx X. Xxxxxx
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Name: ----------------------------------
Title:----------------------------------
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SUBSIDIARY JOINDER AGREEMENT
This SUBSIDIARY JOINDER AGREEMENT (the "AGREEMENT") dated as of January
24, 2003 is executed by the undersigned (the "OBLIGATED PARTY") for the
benefit of BANK OF AMERICA, N.A., as agent for itself and the other Secured
Parties in connection with that certain Credit Agreement dated January 11, 2002,
among NELNET LOAN SERVICES, INC., NELNET, INC. (together the "BORROWERS") and
BANK OF AMERICA, N.A. (the "BANK") (as modified, the "CREDIT AGREEMENT", and
capitalized terms not otherwise defined herein being used herein as defined in
the Credit Agreement).
The Obligated Party is a newly formed or newly acquired Subsidiary (but
not a Special Purpose Vehicle) and is required to execute this Agreement
pursuant to the Credit Agreement.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Obligated Party hereby agrees as follows:
1. The Obligated Party hereby assumes all the obligations of a
"GUARANTOR" under the Guaranty and agrees that it is a "GUARANTOR" and is bound
as a "GUARANTOR" under the terms of the Guaranty as if it had been an original
signatory thereto. In accordance with the forgoing and for valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
Obligated Party irrevocably and unconditionally guarantees to the Agent and the
Secured Parties the full and prompt payment and performance of the Guaranteed
Indebtedness (as defined in the Guaranty) upon the terms and conditions set
forth in the Guaranty.
2. This Agreement shall be deemed to be part of, and a
modification to, the Guaranty and shall be governed by all the terms and
provisions of the Guaranty, which terms are incorporated herein by reference,
are ratified and confirmed and shall continue in full force and effect as valid
and binding agreements of Obligated Party enforceable against Obligated Party.
The Obligated Party hereby waives notice of the Agent's or any Secured Party's
acceptance of this Agreement.
IN WITNESS WHEREOF, the Obligated Party has executed this Agreement as
of the day and year first written above.
Obligated Party:
NELNET CANADA, INC., a Canadian
corporation
By: /s/ Xxxxx X. Xxxxxx
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Name: ----------------------------------
Title:----------------------------------
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SUBSIDIARY JOINDER AGREEMENT
This SUBSIDIARY JOINDER AGREEMENT (the "AGREEMENT") dated as of January
24, 2003 is executed by the undersigned (the "OBLIGATED PARTY") for the benefit
of BANK OF AMERICA, N.A., as agent for itself and the other Secured Parties in
connection with that certain Credit Agreement dated January 11, 2002, among
NELNET LOAN SERVICES, INC., NELNET, INC. (together the "BORROWERS") and BANK OF
AMERICA, N.A. (the "BANK") (as modified, the "CREDIT AGREEMENT", and capitalized
terms not otherwise defined herein being used herein as defined in the Credit
Agreement).
The Obligated Party is a newly formed or newly acquired Subsidiary (but
not a Special Purpose Vehicle) and is required to execute this Agreement
pursuant to the Credit Agreement.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Obligated Party hereby agrees as follows:
1. The Obligated Party hereby assumes all the obligations of a
"GUARANTOR" under the Guaranty and agrees that it is a "GUARANTOR" and is bound
as a "GUARANTOR" under the terms of the Guaranty as if it had been an original
signatory thereto. In accordance with the forgoing and for valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
Obligated Party irrevocably and unconditionally guarantees to the Agent and the
Secured Parties the full and prompt payment and performance of the Guaranteed
Indebtedness (as defined in the Guaranty) upon the terms and conditions set
forth in the Guaranty.
2. This Agreement shall be deemed to be part of, and a
modification to, the Guaranty and shall be governed by all the terms and
provisions of the Guaranty, which terms are incorporated herein by reference,
are ratified and confirmed and shall continue in full force and effect as valid
and binding agreements of Obligated Party enforceable against Obligated Party.
The Obligated Party hereby waives notice of the Agent's or any Secured Party's
acceptance of this Agreement.
IN WITNESS WHEREOF, the Obligated Party has executed this Agreement as
of the day and year first written above.
Obligated Party:
IDAHO FINANCIAL ASSOCIATES, INC.,
an Idaho corporation
By: /s/ Xxxxx X. Xxxxxx
---------------------------------
Name: --------------------------
Title: --------------------------
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SUBSIDIARY JOINDER AGREEMENT
This SUBSIDIARY JOINDER AGREEMENT (the "AGREEMENT") dated as of January
24, 2003 is executed by the undersigned (the "OBLIGATED PARTY") for the benefit
of BANK OF AMERICA, N.A., as agent for itself and the other Secured Parties in
connection with that certain Credit Agreement dated January 11, 2002, among
NELNET LOAN SERVICES, INC., NELNET, INC. (together the "BORROWERS") and BANK OF
AMERICA, N.A. (the "BANK") (as modified, the "CREDIT AGREEMENT", and capitalized
terms not otherwise defined herein being used herein as defined in the Credit
Agreement).
The Obligated Party is a newly formed or newly acquired Subsidiary (but
not a Special Purpose Vehicle) and is required to execute this Agreement
pursuant to the Credit Agreement.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Obligated Party hereby agrees as follows:
1. The Obligated Party hereby assumes all the obligations of a
"GUARANTOR" under the Guaranty and agrees that it is a "GUARANTOR" and is bound
as a "GUARANTOR" under the terms of the Guaranty as if it had been an original
signatory thereto. In accordance with the forgoing and for valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
Obligated Party irrevocably and unconditionally guarantees to the Agent and the
Secured Parties the full and prompt payment and performance of the Guaranteed
Indebtedness (as defined in the Guaranty) upon the terms and conditions set
forth in the Guaranty.
2. This Agreement shall be deemed to be part of, and a
modification to, the Guaranty and shall be governed by all the terms and
provisions of the Guaranty, which terms are incorporated herein by reference,
are ratified and confirmed and shall continue in full force and effect as valid
and binding agreements of Obligated Party enforceable against Obligated Party.
The Obligated Party hereby waives notice of the Agent's or any Secured Party's
acceptance of this Agreement.
IN WITNESS WHEREOF, the Obligated Party has executed this Agreement as
of the day and year first written above.
Obligated Party:
CHARTER SERVICES, INC., a New York
corporation
By: /s/ Xxxxx X. Xxxxxx
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Name: ----------------------------------
Title:----------------------------------
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