Exhibit 10.49
EXECUTION COPY
NELNET STUDENT LOAN TRUST 2002-1
$1,036,270,000
STUDENT LOAN ASSET-BACKED NOTES
UNDERWRITING AGREEMENT
May 9, 0000
Xxxx xx Xxxxxxx Securities LLC
000 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx
XX0-000-00-00
Xxxxxxxxx, XX 00000
X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Nelnet Student Loan Funding, LLC, a Delaware limited liability company
("Nelnet Funding") proposes to cause Nelnet Student Loan Trust 2002-1, a
Delaware business trust (the "Company"), to sell to Banc of America Securities
LLC and X.X. Xxxxxx Securities Inc. (the "Representatives") and the other
underwriters listed on Schedule A hereto (each an "Underwriter" and collectively
with the Representatives, the "Underwriters"), pursuant to the terms of this
Underwriting Agreement, $1,036,270,000 aggregate principal amount of the
Company's Student Loan Asset-Backed 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 on behalf of
the Company. The Notes will be issued under an Indenture of Trust dated as of
May 1, 2002 (the "Indenture") between the Company and Zions First National Bank,
a national banking association, as indenture trustee (the "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 in Section 3 below). The Financed Eligible Loans will be
serviced by NELnet, Inc., a Nevada Corporation ("NELnet") pursuant to a Master
Servicing Agreement dated as of May 1, 2002 (the "Servicing Agreement"), among
NELnet, as master servicer, NELnet, as administrator, Nelnet Funding and the
Company. NELnet has entered into loan subservicing agreements with (i)
InTuition, Inc. ("InTuition"), dated as of May 1, 2002 (the "InTuition
Subservicing Agreement") pursuant to which InTuition will act as subservicer
with respect to certain of the Financed Eligible Loans, (ii) EFS Services, Inc.
("EFS") dated as of May 1, 2002 (the "EFS Subservicing Agreement") pursuant to
which EFS will act as subservicer with respect to certain of the Financed
Eligible Loans and (iii) Nelnet Loan Services, Inc. ("NLS") dated as of May 1,
2002 (the "NLS Subservicing Agreement") pursuant to which NLS will act as
subservicer with respect to certain of the Financed Eligible Loans. The
InTuition Subservicing Agreement, the EFS Subservicing Agreement and the NLS
Subservicing Agreement are referred to collectively as the "Subservicing
Agreements."
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This Agreement, the Loan Purchase Agreement, dated as of May 1, 2002
between NELNET Student Loan Corporation-2 ("NELNET-2") and Nelnet Funding (along
with the related Loan Transfer Addendum, the "NELNET-2 Purchase Agreement"), the
Loan Purchase Agreement, dated as of May 1, 2002 between NHELP-I, Inc.
("NHELP-I") and Nelnet Funding (along with the related Loan Transfer Addendum,
the "NHELP-I Purchase Agreement"), the Loan Purchase Agreement, dated as of May
1, 2002 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 May 1, 2002 between NEBHELP, Inc. ("NEBHELP"
and, collectively with NELNET-2, NHELP-I and NHELP-III, the "Sellers") and
Nelnet Funding (along with the related Loan Transfer Addendum, the "NEBHELP
Purchase Agreement"), the Loan Purchase Agreement, dated as of May 1, 2002
between Nelnet Funding and the Company (along with the related Loan Transfer
Addendum, the "Nelnet Trust Purchase Agreement" and, collectively with the
NELNET-2 Purchase Agreement, the NHELP-I Purchase Agreement, the NHELP-III
Purchase Agreement and the NEBHELP Purchase Agreement, the "Purchase
Agreements"), the Amended and Restated Trust Agreement, dated as of May 1, 2002,
among 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 May 1, 2002, among the Company, the
Delaware Trustee, the Trustee and NELnet, as administrator (the "Administration
Agreement"), the Eligible Lender Trust Agreement, dated as of May 1, 2002,
between Zions First National Bank (the "Eligible Lender Trustee") and Nelnet
Funding (the "Nelnet Funding Eligible Lender Agreement"), the Eligible Lender
Trust Agreement, dated as of May 1, 2002, between the Eligible Lender Trustee
and the Company (the "Company Eligible Lender Agreement" and together with the
Nelnet Funding Eligible Lender Agreement, the "Eligible Lender Agreements"), the
Custodian Agreement, dated as of May 1, 2002, among the Company, the Trustee and
Xxxxxx Xxx Servicing, L.P. ("Xxxxxx Mae"), as custodian (the "Xxxxxx Xxx
Custodian Agreement"), the Custodian Agreement, dated as of May 1, 2002, among
the Company, the Trustee and InTuition, as custodian (the "InTuition Custodian
Agreement"), the Custodian Agreement, dated as of May, 1, 2002, among the
Company, the Trustee and EFS, as custodian (the "EFS Custodian Agreement"), the
Custodian Agreement, dated May 1, 2002, among the Company, the Trustee and NLS,
as custodian (the "NLS Custodian Agreement" and collectively with the Xxxxxx Mae
Custodian Agreement, InTuition Custodian Agreement and the EFS Custodian
Agreement, the "Custodian Agreements"),the Servicing Agreement, the Subservicing
Agreements 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 Company, 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 hereto.
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Nelnet Funding wishes to confirm as follows this agreement with the
Underwriters in connection with the purchase and resale of the Notes.
1. AGREEMENTS TO SELL, PURCHASE AND RESELL. (a) Nelnet Funding hereby
agrees, subject to all the terms and conditions set forth herein, to cause the
Company 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, each of the
Underwriters severally and not jointly agrees to purchase from the Company, such
principal amount of each Class of the Notes 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 Xxxxx
Xxxx LLP, Denver, Colorado, at 11:00 a.m., Denver time, on May 20, 2002 (the
"Closing Date"). The place of such closing and the Closing Date may be varied by
agreement between the Representatives and Nelnet Funding.
The Notes will be delivered to the Underwriters against payment of the
purchase price therefor to the Company in Federal Funds, by wire transfer to an
account at a bank acceptable to the Representatives, or such other form of
payment as to which the parties may agree. Unless otherwise agreed to by Nelnet
Funding and the Representatives, 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 next 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 333-82280),
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 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.
(c) The Commission has not issued and, to the best knowledge of
the Company, 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 the
Company and, upon its execution and delivery by the Company and assuming
due authorization, execution and delivery by the Trustee, will be a
valid and binding agreement of the Company, 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 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.
(f) The Notes have been duly authorized by the Company and the
Notes to be issued on the Closing Date, when executed by the Company 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 Company 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.
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(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 Supplement 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
Company 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
Company nor the execution, delivery or performance of this Agreement or
the Basic Documents by Nelnet Funding or the Company, nor the
consummation by Nelnet Funding or the Company 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 Company or (ii) conflicts or will conflict with
or constitutes or will constitute a breach of, or a default under, in
any material respect, any material agreement, indenture, lease or other
instrument to which Nelnet Funding or the Company is a party or by which
Nelnet Funding or the Company 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 Company 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 Company 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.
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(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) Nelnet Funding's assignment and delivery of Financed
Eligible Loans to the order of the Trustee on behalf of the Company as
of the applicable sale date described in the Purchase Agreements will
vest in the Trustee on behalf of the Company 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.
(m) The Company'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.
(n) The Company 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.
(o) 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 the Company will be true and correct at the
time made and on and as of the applicable Closing Date.
4. AGREEMENTS OF NELNET FUNDING. Nelnet Funding agrees with each of the
Underwriters as follows:
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(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 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 a material fact
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 Representatives 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
Representatives' consent to, nor the Representatives' delivery of, any
such amendment or supplement shall constitute a waiver of any of the
conditions set forth in Section 6 hereof.
(c) Nelnet Funding will immediately inform the Representatives
(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 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 Representatives, 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 in such quantities as the
Representatives may reasonably request.
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(e) No amendment or supplement will be made to the Registration
Statement or Prospectus which the Underwriters shall not previously have
been advised or to which it shall reasonably object after being so
advised.
(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 as the Underwriters may request
from time to time.
(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 Representatives terminating this
Agreement pursuant to Section 8 or Section 9 hereof) or if this
Agreement shall be terminated by the Representatives 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 it
in connection herewith, but without any further obligation on the part
of Nelnet Funding for loss of profits or otherwise.
(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.
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(l) 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, the Company will deliver to you the annual
statements of compliance and the annual independent certified public
accountants' reports furnished to the Trustee or Nelnet Funding pursuant
to the Servicing Agreement as soon as such statements and reports are
furnished to the Trustee or Nelnet Funding.
(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 the Servicer, InTuition, EFS and NLS 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 Company in, the Initial Financed Eligible Loans, and
from and after each Closing Date Nelnet Funding will take, or cause the
Servicer, InTuition, EFS and NLS to take, as the case may be, such
actions with respect to the respective records of each with regard to
any Additional Acquired Eligible Loans at the time of the acquisition
thereof by the Trustee on behalf of the Company 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 Company 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.
(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, (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 and (iii) the date of the
Company's most recent Annual Report or Form 10-K filed with the
Commission prior to the date of this Agreement, which will satisfy the
provisions of Section 11(a) of the Act.
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5. 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 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 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 Funding by such
Underwriter through the Representatives 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 10 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. 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 except to
the extent that the indemnifying party is materially prejudiced by such
omission. 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
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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 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 an Underwriter furnished in writing by such Underwriter
through the Representatives 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 10 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 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 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.
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(d) If the indemnification provided for in this Section 5 is
unavailable to 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
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 Company 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 5 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 5, no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Notes underwritten by it
and distributed to the public were offered to the public exceeds 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. 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.
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(f) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or
contribution under this Section 5 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 5 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 5.
6. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters to purchase the Notes hereunder 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, the Sellers, the Servicer, InTuition, EFS or NLS not
contemplated by the Registration Statement, which in the opinion of the
Representatives, would materially adversely affect the market for the
Notes, (ii) any downgrading in the rating of any debt securities of
trusts sponsored by Nelnet Funding, a Seller, the Servicer, InTuition,
EFS or NLS 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, a Seller, the Servicer, InTuition, EFS or
NLS (other than an announcement with positive implications of a possible
upgrading, and no implication of a possible downgrading, of such
rating), or (iii) 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 Representatives, materially
adversely affect the market for the Notes.
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(c) You shall have received an opinion addressed to you of Xxxxx
Xxxx LLP, in its capacity as counsel to the Company, 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 Company Eligible Lender 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
Company, 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 Company and from the Company 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 Company,
dated the Closing Date, in form and substance satisfactory to you and
your counsel to the effect that the statements in the 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 Company,
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 & Ingersoll LLP, in its capacity as counsel for
Nelnet Funding and the Company, 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 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 NELnet,
as servicer and administrator, 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 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.
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(ii) The Purchase Agreements have been duly authorized,
executed and delivered by the respective Seller, 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
and the Administration Agreement, the Servicing Agreement and
the Subservicing Agreements 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 and NELnet, as the case may be, enforceable against each
such Seller, Nelnet Funding 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 NELnet of
the Administration Agreement, the Servicing Agreement or the
Subservicing Agreements, 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, nor the consummation by
NELnet, Nelnet Funding or each Seller of the transactions
contemplated therein nor the fulfillment of the terms thereof by
NELnet, Nelnet Funding or each Seller 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 NELnet,
Nelnet Funding or each Seller or of any indenture or other
agreement or instrument to which NELnet, Nelnet Funding or any
Seller is a party or by which NELnet, Nelnet Funding or any
Seller is bound, or result in a violation of or contravene the
terms of any statute, order or regulation applicable to NELnet,
Nelnet Funding or any Seller of any court, regulatory body,
administrative agency or governmental body having jurisdiction
over NELnet, Nelnet Funding or any Seller.
(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 NELnet,
Nelnet Funding or any Seller before or by any governmental
authority that might materially and adversely affect the
performance by NELnet, Nelnet Funding or any Seller 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 NELnet contained in the Administration Agreement,
the Servicing Agreement, or the Subservicing Agreements, or the
representations and warranties of Nelnet Funding 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 are other than as stated therein.
15
(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 NELnet of the Administration Agreement, the
Servicing Agreement or the Subservicing Agreements, (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
or (d) for the perfection of the Company's and the Trustee's
interest in the Student Loans sold pursuant to the Purchase
Agreements or the exercise by the Company (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 Purchase Agreements together with the related
xxxx of sale and blanket endorsement effects a valid sale to the
Trustee of the Student Loans to be sold under the Purchase
Agreements enforceable against creditors of, and purchasers
from, the respective Seller.
(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 related Purchase Agreement 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 related Purchase Agreement 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 Nebraska 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 Trustee is an
eligible lender as that term is defined in 20 U.S.C. Section
1085(d)(1) of the Higher Education Act of 1965, as amended, the
Trustee on behalf of the Company 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 from
time to time under the Purchase Agreements, subject to the terms
and conditions of the Guarantee Agreements and the Act.
16
(i) You shall have received opinions addressed to you of
Xxxxxxxx, Xxxxxx & Finger, in their capacity as counsel to the Delaware
Trustee, and as Delaware counsel to the Company 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 Agreements, the Eligible Lender Agreements, the
Administration Agreement and each Guarantee Agreement.
(iii) The execution and delivery of each of the
Indenture, the Custodian Agreements, the Eligible Lender
Agreements, the Administration Agreement and each Guarantee
Agreement, and the performance by the Trustee of its obligations
under the Indenture, the Custodian 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 Agreements, the
Eligible Lender Agreements, the Administration Agreement 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 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
Agreements, the Eligible Lender Agreements, the Administration
Agreement 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.
17
(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 Agreements, the Eligible Lender Agreements, the
Administration Agreement or any Guarantee Agreement.
(ix) The execution, delivery and performance by the
Trustee of the Indenture, the Custodian Agreements, the Eligible
Lender Agreements, the Administration Agreement or any Guarantee
Agreement will not subject any of the property or assets of the
Company 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 two 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 each Seller and the Servicer in
which such officers shall state that, to the best of their knowledge
after reasonable investigation, (i) the representations and warranties
of such Seller or the Servicer, as the case may be, contained in the
respective Purchase Agreement, the Servicing Agreement and the
Subservicing Agreements, as applicable, are true and correct in all
material respects, that each of such Seller and the Servicer 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 such Seller or the Servicer, 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 such Seller or the Servicer,
as applicable, has occurred.
(l) You shall have received certificates addressed to you dated
the Closing Date of any two 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 InTuition, EFS and NLS in which
such officers shall state that, to the best of their knowledge after
reasonable investigation, (i) the representations and warranties of
InTuition, EFS and NLS contained in the Subservicing Agreements are true
18
and correct in all material respects, that each of InTuition, EFS and
NLS 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 InTuition, EFS and NLS 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 InTuition, EFS and NLS has occurred.
(m) 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 Company in
the Financed Eligible Loans and the proceeds thereof to the Trustee.
(n) 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.
(o) The Underwriters shall have received on the Closing Date
from KPMG Peat Marwick a letter dated the Closing Date, and in form and
substance satisfactory to the Representatives, 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.
(p) All the representations and warranties of Nelnet Funding and
the Company 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 6(p) and in Section 6(q) hereof.
(q) Neither Nelnet Funding nor the Company 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.
(r) The Underwriters shall have received by instrument dated the
Closing Date (at the option of the Representatives), in lieu of or in
addition to the legal opinions referred to in this Section 6, the right
to rely on opinions provided by such counsel and all other counsel under
the terms of the Basic Documents.
(s) 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 Services, Inc. ("Moody's"), the Class B Notes shall be rated
"A", "A-" and "A2", 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.
19
(t) 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 the Sellers', InTuition's, EFS's and NLS's
computer systems.
(u) You shall have received certificates addressed to you dated
the Closing Date from officers of Nelnet Funding addressing such
additional matters as you may reasonably request in form and substance
satisfactory to you and your counsel.
(v) You shall have received a signed Indemnity Agreement from
Nelnet Loan Services, Inc. in form and substance satisfactory to you and
your counsel.
(w) 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.
7. 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 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 and all amendments
or supplements to 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 Company'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 Peat Marwick, accountants for the Company and
issuer of the Comfort Letter; (viii) the financial advisory fee payable to UFS
Securities, L.L.C.; and (ix) the fees charged by S&P, Fitch and Xxxxx'x for
rating the Notes.
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8. 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
Representatives, or by the Representatives, by notifying Nelnet Funding.
Any notice under this Section 8 may be given by telecopy or
telephone but shall be subsequently confirmed by letter.
9. TERMINATION OF AGREEMENT. This Agreement shall be subject to
termination in the absolute discretion of the Representatives, 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 on the
financial markets of the United States is such as to make it, in the judgment of
the Representatives, 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.
10. INFORMATION FURNISHED BY THE UNDERWRITERS. The statements set forth
in the second, third, ninth and tenth paragraphs and the second 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 5 hereof.
11. 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 Underwriter (the
"Non-Defaulting Underwriter") 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 Defaulted Notes upon the terms herein set forth;
if, however, the Non-Defaulting Underwriter shall have not completed such
arrangements within such one (1) Business Day period, then this Agreement shall
terminate without liability on the part of the Non-Defaulting Underwriter.
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.
12. COMPUTATIONAL MATERIALS. (a) It is understood that the Underwriters
may prepare and provide to prospective investors certain Computational Materials
(as defined below) in connection with Nelnet Funding's offering of the Notes,
subject to the following conditions:
21
(i) The Underwriters shall comply with all applicable
laws and regulations in connection with the use of Computational
Materials including the No-Action Letter of May 20, 1994 issued
by the Commission to Xxxxxx, Peabody Acceptance Corporation I,
Xxxxxx, Xxxxxxx & 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 (collectively, the
"Xxxxxx/PSA Letters").
(ii) As used herein, "Computational Materials" and the
term "ABS Term Sheets" shall have the meanings given such terms
in the Xxxxxx/PSA Letters, but shall include only those
Computational Materials that have been prepared or delivered to
prospective investors by or at the direction of an Underwriter.
(iii) Each Underwriter shall provide Nelnet Funding with
representative forms of all Computational Materials prior to
their first use, to the extent such forms have not previously
been approved by Nelnet Funding for use by such Underwriter.
Each Underwriter shall provide to Nelnet Funding, for filing on
Form 8-K as provided in Section 11(b), copies of all
Computational Materials that are to be filed with the Commission
pursuant to the Xxxxxx/PSA Letters. Each Underwriter may provide
copies of the foregoing in a consolidated or aggregated form.
All Computational Materials described in this subsection
(a)(iii) must be provided to Nelnet Funding not later than 10:00
A.M., Colorado time, one business day before filing thereof is
required pursuant to the terms of this Agreement.
(iv) If an Underwriter does not provide the
Computational Materials to Nelnet Funding pursuant to subsection
(a)(iii) above, such Underwriter shall be deemed to have
represented, as of the applicable Closing Date, that it did not
provide any prospective investors with any information in
written or electronic form in connection with the offering of
the Notes that is required to be filed with the Commission in
accordance with the Xxxxxx/PSA Letters.
(v) In the event of any delay in the delivery by an
Underwriter to Nelnet Funding of all Computational Materials
required to be delivered in accordance with subsection (a)(iii)
above, Nelnet Funding shall have the right to delay the release
of the Prospectus to investors or to such Underwriter, to delay
the Closing Date and to take other appropriate actions in each
case as necessary in order to allow Nelnet Funding to comply
with its agreement set forth in Section 11(b) to file the
Computational Materials by the time specified therein.
(b) Nelnet Funding shall file the Computational Materials (if
any) provided to it by the Underwriter under Section 11(a)(iii) with the
Commission pursuant to a Current Report on Form 8-K no later than 5:30
P.M., New York time, on the date required pursuant to the Xxxxxx/PSA
Letters.
22
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 delivery of and payment for the Notes.
14. MISCELLANEOUS. Except as otherwise provided in Sections 5, 8 and 9
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 Xxxxxxx X. Xxxxx, Stroock & Stroock & Xxxxx LLP, 000 Xxxxxx
Xxxx, Xxx Xxxx, Xxx Xxxx 00000.
This Agreement has been and is made solely for the benefit of the
Underwriters, Nelnet Funding, the Company, their respective directors, officers,
managers, trustees and controlling persons referred to in Section 5 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 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.
[Remainder of page intentionally left blank.]
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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, Inc., as Manager
By: /S/ XXXXXXX X. XXXXXXXXX
---------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President
Confirmed as of the date first above mentioned.
BANC OF AMERICA SECURITIES LLC, acting on behalf of itself and as
Representative of the Underwriters
By: /S/ XXXXXXXXXXX X. XXXXX
-----------------------------
Name: Xxxxxxxxxxx X. Xxxxx
Title: Principal
X.X. XXXXXX SECURITIES INC., acting on behalf of itself and as
Representative of the Underwriters
By: /S/ XXXXXXX XXXXXXX
------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President
24
SCHEDULE A
Banc of America X.X. Xxxxxx Mellon Financial Xxxxxxx Xxxxx
Notes Securities LLC Securities Inc. Markets, LLC Barney Inc. UBS Warburg LLC TOTAL
---------- --------------- --------------- --------------- --------------- --------------- ---------------
Class A-1 $ 83,000,000 $ 83,000,000 $ 83,000,000 $ 83,000,000 $ 83,000,000 $ 415,000,000
--------------- --------------- --------------- --------------- --------------- ---------------
Class A-2 $ 117,000,000 $ 117,000,000 $ 117,000,000 $ 117,000,000 $ 117,000,000 $ 585,000,000
--------------- --------------- --------------- --------------- --------------- ---------------
Class B $ 7,254,000 $ 7,254,000 $ 7,254,000 $ 7,254,000 $ 7,254,000 $ 36,270,000
--------------- --------------- --------------- --------------- --------------- ---------------
Terms of the Notes
Class Interest Rate Final Maturity Date Price to Public Underwriting Discount Proceeds to Issuer
-------- ------------------------ ------------------- --------------- --------------------- ------------------
2002 A-1 3-month LIBOR plus 0.04% May 25, 2011 100% 0.20% $ 414,170,000
2002 A-2 3-month LIBOR plus 0.17% May 25, 2027 100% 0.27% $ 583,420,500
2002 B 3-month LIBOR plus 0.55% August 25, 2032 100% 0.50% $ 36,088,650
TOTAL $ 1,033,679,150
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