Exhibit 10.9.1
EXECUTION COPY
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AMENDMENT NO. 2
dated as of July 7, 2004
to
CREDIT AGREEMENT
dated as of October 30, 2003
between
COLLEGIATE FUNDING SERVICES, L.L.C.,
as Borrower
COLLEGIATE FUNDING SERVICES, INC.
(f/k/a CFSL Corp., f/k/a CFSL Holdings Corp.)
and
CFSL ACQUISITION CORP.,
as Parent Guarantors
THE SUBSIDIARY GUARANTORS REFERRED TO HEREIN,
as Subsidiary Guarantors
THE LENDERS NAMED HEREIN,
as Lenders
and
JPMORGAN CHASE BANK,
as Administrative Agent
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AMENDMENT NO. 2
AMENDMENT NO. 2 dated as of July 7, 2004 (this "Amendment No. 2") to
the Credit Agreement referred to below, between COLLEGIATE FUNDING SERVICES,
L.L.C. (the "Borrower"), COLLEGIATE FUNDING SERVICES, INC. (f/k/a CFSL Corp.,
f/k/a CFSL Holdings Corp.)(the "Parent"), CFSL ACQUISITION CORP. ("CFSL"), the
SUBSIDIARY GUARANTORS party hereto (the "Subsidiary Guarantors" and, together
with the Parent and CFSL, the "Guarantors"), the LENDERS party hereto (the
"Lenders"), and JPMORGAN CHASE BANK, as Administrative Agent (the
"Administrative Agent").
The Borrower, the Guarantors, the Lenders and the Administrative Agent
are parties to a Credit Agreement dated as of October 30, 2003 (as heretofore
modified and supplemented and in effect on the date hereof immediately prior to
the effectiveness of this Amendment No. 2, the "Credit Agreement"), providing,
subject to the terms and conditions thereof, for loans to be made by said
Lenders to the Borrower in an aggregate principal amount not exceeding
$62,500,000 at any one time outstanding.
As contemplated by a Form S-1 Registration Statement filed with the
Securities and Exchange Commission on April 14, 2004 pursuant to the Securities
Act of 1933, as amended, the Parent proposes in an initial public offering to
issue shares of its common stock (the "IPO") and, in connection therewith, the
Borrower and the Guarantors have requested that the Lenders agree to certain
amendments to the Credit Agreement. Accordingly, the parties hereto hereby agree
as follows:
Section 1. Definitions. Except as otherwise defined in this Amendment
No. 2, terms defined in the Credit Agreement are used herein as defined therein.
Section 2. Amendments. Subject to the satisfaction of the conditions
precedent specified in Section 4, but effective as of the Amendment No. 2
Effective Date (as defined in Section 4), the Credit Agreement shall be amended
as follows:
2.01. General References. References in the Credit Agreement
(including references to the Credit Agreement as amended hereby) to "this
Agreement" (and indirect references such as "hereunder", "hereby", "herein" and
"hereof") shall be deemed to be references to the Credit Agreement as amended
hereby.
2.02. Certain Definitions.
(a) Section 1.01 of the Credit Agreement shall be amended by inserting
the following new definitions (to the extent not already included in said
Section 1.01) in the appropriate alphabetical locations, and by amending in
their entirety the following definitions (to the extent already included in
said Section 1.01), as follows:
"Amendment No. 2" means Amendment No. 2 dated as of July 7, 2004
to this Agreement.
"Amendment No. 2 Effective Date" means the effective date of
Amendment No. 2.
"Commitment" means, with respect to each Lender, the commitment
of such Lender to make Loans hereunder, expressed as an amount
representing the maximum aggregate amount of such Lender's Revolving
Credit Exposure hereunder, as such commitment may be (a) reduced from
time to time pursuant to Section 2.06 or 2.08(b) and (b) reduced or
increased from time to time pursuant to assignments by or to such
Lender pursuant to Section 10.04. The amount of each Lender's
Commitment is set forth on Schedule I to Amendment No. 2, or in the
Assignment and Assumption pursuant to which such Lender shall have
assumed its Commitment, as applicable.
"Commitment Termination Date" means the date occurring 364 days
after the Amendment No. 2 Effective Date or, if such date is not a
Business Day, the immediately preceding Business Day.
"Management Agreement" means the Management Agreement dated as of
May 17, 2002 by and among the Parent, the Borrower, CFSL and Lightyear
Capital LLC, as amended by the First Amendment to the Management
Agreement dated as of April 15, 2003 and the Second Amendment to the
Management Agreement dated as of June 18, 2004, each such amendment by
and among the Parent, the Borrower, CFSL and Lightyear Capital LLC,
but without giving effect to any modifications thereto after the
Amendment No. 2 Effective Date.
(b) Section 1.01 of the Credit Agreement shall be further amended by
deleting the definitions of "Commitment Reduction Dates" and "Excess Cash
Balance".
2.03. Limitations on Interest Periods. Section 2.02(d) of the Credit
Agreement shall be amended to read in its entirety as follows:
"(d) Limitations on Interest Periods. Notwithstanding any other
provision of this Agreement, the Borrower shall not be entitled to request
(or to elect to convert to or continue as a Eurodollar Borrowing) any
Borrowing if the Interest Period requested therefor would end after the
Commitment Termination Date."
2.04. Scheduled Termination. Section 2.06(a) of the Credit Agreement
shall be amended to read in its entirety as follows:
"(a) Scheduled Termination. Unless previously terminated, the
Commitments shall terminate on the Commitment Termination Date."
2.05. Voluntary Commitment Reductions Carry Forward. Section 2.06(d)
of the Credit Agreement shall be deleted in its entirety and replaced with the
words "(d) Reserved."
2.06. Repayment of Loans. Section 2.07(a) of the Credit Agreement
shall be amended to read in its entirety as follows:
"(a) Repayment. The Borrower hereby unconditionally promises to pay to
the Administrative Agent for account of the Lenders the outstanding
principal amount of the Loans on the Commitment Termination Date."
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2.07. Excess Cash Balance. Section 2.08(b) of the Credit Agreement
shall be amended as follows:
(A) clause (ii) thereof shall be deleted in its entirety and replaced
with the words "(ii) Reserved."; and
(B) clause (v) thereof shall be amended by deleting in its entirety
the last sentence thereof.
2.08. Use of Proceeds. Section 6.11 of the Credit Agreement shall be
amended in its entirety to read as follows:
"SECTION 6.11. Use of Proceeds. The proceeds of the Loans shall be
used only for the general operating purposes of the Borrower and its
Subsidiaries, provided that in no event shall any portion of the proceeds
of the Loans be used directly or indirectly to finance the purchase of
student loan receivables, it being understood that this Section shall not
limit the Borrower's ability to purchase either completed applications for
FFELP Loans or recently disbursed FFELP Loans, in each case in the ordinary
course of business."
2.09. Restricted Payments. Section 7.06(c) of the Credit Agreement
shall be amended in its entirety to read as follows:
"(c) the Borrower may make payments to Persons pursuant to the
Management Agreement, provided that no such payment may be made by the
Borrower after the occurrence and during the continuance of any Default or
Event of Default; and".
2.10. Capital Expenditures. Section 7.09(d) of the Credit Agreement
shall be amended by replacing the figure "$5,500,000" appearing therein with the
figure "$7,000,000".
2.11. Amendments. Section 10.02(b)(i) of the Credit Agreement shall be
amended to read in its entirety as follows:
"(i) increase the Commitment of any Lender without the written consent
of such Lender,".
2.12. Schedule II. Part A of Schedule II to the Credit Agreement shall
be amended by adding at the end thereof to following item:
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10 CFSL Acquisition Corp, as issuer, 5/7/02 $15,000,000 Promissory Note
and NOBS Capital Ventures, L.L.C.,
as payee
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Section 3. Representations and Warranties. Each Obligor represents and
warrants to the Lenders, both immediately prior to this Amendment No. 2 becoming
effective and after giving effect thereto, that (a) the representations and
warranties of such Obligor set forth in Article IV of the Credit Agreement and
in each of the other Credit Documents to which
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it is a party, are true and correct on and as of the date hereof with the same
force and effect as if made on and as of the date hereof (or, if any such
representation and warranty is expressly stated to have been made as of a
specific date, as of such specific date) and as if each reference in said
Article IV to "this Agreement" (or words of similar import) or in such other
Credit Documents to "the Credit Agreement" (or words of similar import) included
reference to this Amendment No. 2, (b) the IPO constitutes a "Qualified Public
Offering" under and as defined in the Credit Agreement and (c) no Default has
occurred and is continuing.
Section 4. Conditions Precedent. The amendments to the Credit
Agreement set forth in Section 2 and the consents and agreements set forth in
Section 6 shall become effective as of the date (the "Amendment No. 2 Effective
Date") of the consummation of the IPO (provided that such consummation shall
occur on or before July 31, 2004), but subject to the prior or concurrent
satisfaction of the following conditions precedent:
4.01. Amendment No. 2. The Administrative Agent shall have received
one or more counterparts of this Amendment No. 2 executed by each Obligor
and each Lender.
4.02. Consummation of the IPO. The Administrative Agent shall have
received evidence satisfactory to it that the IPO shall have been (or shall
be concurrently) consummated in all material respects in accordance with
the terms of the registration statement or statements filed with the
Securities and Exchange Commission and each other document delivered in
connection with the IPO (which registration statement or statements and
other documents shall be satisfactory to the Administrative Agent and the
Lenders).
4.03. Opinions of Counsels to the Obligors. The Administrative Agent
shall have received a favorable written opinion (addressed to the
Administrative Agent and the Lenders and dated the Amendment No. 2
Effective Date) of (i) the General Counsel of the Borrower, (ii) Xxxxxxx,
Xxxxxxxx & Xxxxxxxx, LLC, New York counsel for the Obligors and (iii)
XxXxxxx Xxxx, a Professional Corporation, Virginia counsel for the
Obligors, in each case covering such matters relating to the Obligors, this
Amendment No. 2 or the transactions contemplated hereby as the Lenders
shall reasonably request (and each Obligor hereby instructs such counsels
to deliver such opinions to the Lenders and the Administrative Agent).
4.04. Corporate Documents. The Administrative Agent shall have
received such documents and certificates as the Administrative Agent or its
counsel may reasonably request relating to the organization, existence and
good standing of each Obligor, the authorization of the transactions
contemplated by this Amendment No. 2 and any other legal matters relating
to the Obligors, this Amendment No. 2 or the transactions contemplated
hereby, all in form and substance satisfactory to the Administrative Agent
and its counsel.
4.05. Officer's Certificate. The Administrative Agent shall have
received a certificate, dated the Amendment No. 2 Effective Date and signed
by a Financial Officer of the Borrower, in respect of the matters set forth
in Section 3, in form and substance satisfactory to the Administrative
Agent and its counsel.
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4.06. Payment of Fees. The Administrative Agent shall have received
evidence satisfactory to the Administrative Agent of payment (or
irrevocable instructions for payment) by the Borrower in full of the fees
provided for in the fee letter dated July 6, 2004 addressed by the Borrower
to the Administrative Agent (including the reasonable accrued fees and
expenses of counsel to JPMCB) in connection with this Amendment No. 2.
4.07. Merger; IPO Proceeds. The Administrative Agent shall have
received evidence satisfactory to it that (a) the Merger (as defined in
Section 6) shall have been (or shall concurrently be) consummated and (b)
the aggregate Net Available Proceeds of the IPO shall have been (or shall
concurrently be) applied, to the extent required in Section 6, to the
payment of the liquidation price in respect of Preferred Stock of CFSL and
the prepayment of Loans outstanding under the Credit Agreement.
4.08. Other Documents. The Administrative Agent shall have received
such other documents as the Administrative Agent may reasonably request.
Section 5. Confirmation of Guarantees and Security Interests. Each of
the Guarantors, by its execution of this Amendment No. 2, hereby consents to
this Amendment No. 2 and confirms and ratifies that all of its obligations as a
Guarantor under the Credit Agreement (including, without limitation, Article III
thereof) shall continue in full force and effect for the benefit of the
Administrative Agent and the Lenders with respect to the Credit Agreement as
amended hereby. Each of the Obligors, by its execution of this Amendment No. 2,
hereby confirms that the security interests granted by it under each of the
Security Documents to which it is a party shall continue in full force and
effect in favor of the Administrative Agent for the benefit of the Lenders and
the Administrative Agent with respect to the Credit Agreement as amended hereby.
Section 6. Provisions Relating to the Qualified Public Offering.
Subject to the satisfaction of the conditions precedent specified in Section 4,
(i) the Lenders hereby consent to (A) the merger (herein, the "Merger") of CFSL
with and into the Parent (with the Parent being the surviving entity) as
described in the resolutions of the board of directors of the Parent in the form
heretofore delivered to each Lender and (B) the amendment to the Management
Agreement pursuant to the Second Amendment thereto dated as of June 18, 2004 and
(ii) the parties hereto hereby agree that, anything in the Credit Agreement to
the contrary notwithstanding, on the Amendment No. 2 Effective Date, (A) the
Parent shall apply a portion of the Net Available Proceeds of the IPO to the
payment in full, pursuant to the Merger and the liquidation of CFSL, of the
outstanding shares of Preferred Stock of CFSL at the liquidation price therefor
specified in the Amended and Restated Certificate of Incorporation of CFSL, and
(B) the Borrower shall apply 100% of any Net Available Proceeds in excess
thereof to the prepayment of the Loans outstanding under the Credit Agreement
until the entire principal amount thereof shall have been prepaid, provided that
the aggregate amount of such prepayment shall in no event be less than the
amount necessary to reduce the aggregate outstanding principal amount of the
Loans to an amount not exceeding $30,000,000.
Subject to the compliance by the Borrower with the requirements of
this Section 6, Section 2.08(b)(i) shall not be applicable to the Net Available
Proceeds of the IPO,
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and no reduction of Commitments (beyond those provided in this Amendment No. 2)
shall be required as a result of the IPO.
Section 7. Continuation of Existing Loans Under the Credit Agreement.
Anything in this Amendment No. 2 or in the Credit Agreement as amended hereby
notwithstanding, the Borrower hereby agrees that (i) the Loans outstanding under
the Credit Agreement immediately prior to effectiveness of this Amendment No. 2
but after giving effect to the prepayment provided for in Section 6 (the
"Existing Loans") shall automatically be continued under the Credit Agreement as
amended hereby and (ii) the Commitments of the Lenders under the Credit
Agreement as amended hereby will be deemed utilized by the Borrower on the
Amendment No. 2 Effective Date in an aggregate amount equal to the aggregate
outstanding principal amount of the Existing Loans.
Section 8. Miscellaneous. Except as herein provided, the Credit
Agreement shall remain unchanged and in full force and effect. This Amendment
No. 2 may be executed in any number of counterparts, all of which taken together
shall constitute one and the same amendatory instrument and any of the parties
hereto may execute this Amendment No. 2 by signing any such counterpart. This
Amendment No. 2 shall be governed by, and construed in accordance with, the law
of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No.
2 to be duly executed and delivered as of the day and year first above written.
BORROWER
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COLLEGIATE FUNDING SERVICES, L.L.C.
by CFSL ACQUISITION CORP.,
as member
By /s/ Xxxxx Xxxxxxxxxx
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Name: Xxxxx Xxxxxxxxxx
Title: Treasurer
U.S. Tax I.D. Number for the Borrower:
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00-0000000
Address for the Borrower:
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Collegiate Funding Services, L.L.C.
000 Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxxxxxx, XX 00000
PARENT GUARANTORS
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COLLEGIATE FUNDING SERVICES, INC. (f/k/a CFSL
Corp., f/k/a CFSL Holdings Corp.)
By /s/ Xxxxx Xxxxxxxxxx
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Name: Xxxxx Xxxxxxxxxx
Title: Treasurer
CFSL ACQUISITION CORP.,
By /s/ Xxxxx Xxxxxxxxxx
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Name: Xxxxx Xxxxxxxxxx
Title: Treasurer
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SUBSIDIARY GUARANTORS
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XXXXXXXXXX.XXX, L.L.C.
By /s/ Xxxxx Xxxxxxxxxx
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Name: Xxxxx Xxxxxxxxxx
Title: Treasurer
CFS SERVICING, LLC
By /s/ Xxxxx Xxxxxxxxxx
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Name: Xxxxx Xxxxxxxxxx
Title: Treasurer
CFS-SUNTECH SERVICING LLC
By /s/ Xxxxx Xxxxxxxxxx
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Name: Xxxxx Xxxxxxxxxx
Title: Treasurer
MEMBERS CONNECT INC.
By /s/ Xxxxx Xxxxxxxxxx
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Name: Xxxxx Xxxxxxxxxx
Title: Treasurer
EGRAD INC.
By /s/ Xxxxx Xxxxxxxxxx
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Name: Xxxxx Xxxxxxxxxx
Title: Treasurer
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COLLEGE PUBLISHER, INC.
By /s/ Xxxxx Xxxxxxxxxx
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Name: Xxxxx Xxxxxxxxxx
Title: Treasurer
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LENDERS
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JPMORGAN CHASE BANK,
individually and as Administrative Agent
By /s/ Xxxxxxxxx Xxxxxxx
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Name: Xxxxxxxxx Xxxxxxx
Title: Vice President
BANK OF AMERICA, N.A.
By /s/ Xxxx Xxxxxxxx
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Name: Xxxx Xxxxxxxx
Title: Vice President
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SCHEDULE I
COMMITMENTS
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Lender Commitment Amount
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JPMorgan Chase Bank $15,000,000.00
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Bank of America, N.A. $15,000,000.00
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