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Exhibit 1.1
PNC STUDENT LOAN TRUST I
$1,030,000,000 STUDENT LOAN ASSET BACKED NOTES
SERIES 1997-2
UNDERWRITING AGREEMENT
June _____, 1997
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
As Representative of the
several Underwriters
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
PNC Bank, National Association, a national banking
association (as transferor of the Financed Student Loans to the Trust (each as
defined below), the "Bank"), has formed a trust known as PNC Student Loan Trust
I (the "Trust") under the laws of the State of Delaware and the Bank proposes
to cause the Trust to sell to the underwriters named in Schedule I hereto (the
"Underwriters"), for whom you (the "Representative") are acting as
representative, pursuant to the terms of this Underwriting Agreement, Series
1997-2 Asset Backed Notes in the following Classes and initial principal
amounts: $90,000,000 Senior LIBOR Rate Class A-1 Asset Backed Notes (the "Class
A-1 Notes"), $107,000,000 Senior Fixed Rate Class A-2 Asset Backed Notes (the
"Class A-2 Notes"), $107,000,000 Senior Fixed Rate Class A-3 Asset Backed Notes
(the "Class A-3 Notes"), $102,000,000 Senior Fixed Rate Class A-4 Asset Backed
Notes (the "Class A-4 Notes"), $94,000,000 Senior Fixed Rate Class A-5 Asset
Backed Notes (the "Class A-5 Notes"), $72,500,000 Senior Fixed Rate Class A-6
Asset Backed Notes (the "Class A-6 Notes"), $121,000,000 Senior Fixed Rate
Class A-7 Asset Backed Notes (the "Class A-7 Notes"), $175,000,000 Senior LIBOR
Rate Class A-8 Asset Backed Notes (the "Class A-8 Notes"), $125,450,000 Senior
LIBOR Rate Class A-9 Asset Backed Notes (the "Class A-9 Notes" and together
with the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class
A-4 Notes, the Class A-5 Notes, the Class A-6 Notes, the Class A-7 Notes and
the Class A-8 Notes, the "Class A Notes") and $36,050,000 Subordinate LIBOR
Rate Class B Asset
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Backed Notes (the "Class B Notes" and together with the Class A Notes, the
"Notes"). The First National Bank of Chicago, a national banking association,
acts as eligible lender trustee (the "Eligible Lender Trustee") of the Trust.
On the Closing Date, Financed Student Loans (as defined in the Transfer and
Servicing Agreement defined below) will have been transferred to the Eligible
Lender Trustee on behalf of the Trust by the Bank. The Notes will be issued
under an indenture dated as of March 27, 1997 (the "Master Indenture") between
the Trust and Bankers Trust Company, as indenture trustee ("Indenture
Trustee"), as supplemented by a related Second Terms Supplement (the "Second
Terms Supplement" and collectively with the Master Indenture, the "Indenture").
Upon issuance, the Notes will be secured by, among other things, Financed
Student Loans pledged to the Indenture Trustee and described in the Prospectus
(as defined in Section 3 below). This Agreement, the Transfer and Servicing
Agreement, the Indenture, the Administration Agreement and the Trust Agreement
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 Transfer and Servicing Agreement dated as of June ____,
1997, (the "Transfer and Servicing Agreement") among the Trust, the Bank and
the Eligible Lender Trustee.
1. Purchase, Sale and Delivery of the Notes.
(a) On the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Bank agrees to cause the Trust to sell to the Underwriters, and the
Underwriters agree, severally and not jointly, to purchase from the Trust: the
Class A-1 Notes, at a purchase price of _____% of the principal amount of the
Class A-1 Notes; the Class A-2 Notes, at a purchase price of _____% of the
principal amount of the Class A-2 Notes; the Class A-3 Notes, at a purchase
price of ___% of the principal amount of the Class A-3 Notes; the Class A-4
Notes, at a purchase price of ____% of the principal amount of the Class A-4
Notes; the Class A-5 Notes, at a purchase price of ___% of the principal amount
of Class A-5 Notes; the Class A-6 Notes, at a purchase price of ___% of the
principal amount of the Class A-6 Notes; the Class A-7 Notes, at a purchase
price of ___% of the principal amount of the Class A-7 Notes; the Class A-8
Notes, at a purchase price of ___% of the principal amount of the Class A-8
Notes; the Class A-9 Notes, at a purchase price of ___% of the principal amount
of the Class A-9 Notes; and the Class B Notes at a purchase price of _____% of
the principal amount of the Class B Notes, the respective principal amounts of
each Class of Notes set forth opposite the names of the Underwriters in
Schedule I hereto. In addition, the Bank agrees to pay ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. a
structuring fee equal to 5% of the initial principal amount of the Notes.
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(b) Delivery to the Representative of and payment for the
Notes shall be made at the office of Stroock & Stroock & ▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at 10:00 A.M., New York City time, on June ___,
1997 (the "Closing Date"). The place of such closing and the Closing Date may
be varied by agreement between the Representative and the Bank.
The Notes will be delivered by the Bank to the Representative
for the respective accounts of the Underwriters against payment of the purchase
price therefor to or upon the order of the Bank in Federal Funds, by wire, or
such other form of payment as to which the parties may agree. Each Class of
Notes will be evidenced by a single global security in definitive form 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 Representative 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 Representative shall be made available to the
Representative in New York City for inspection and packaging not later than
9:30 a.m., New York City time, on the business day next preceding the Closing
Date.
2. Offering by the Underwriters.
(a) It is understood that, after the Registration Statement
becomes effective, the Underwriters propose to offer the Notes for sale to the
public (which may include selected dealers) as set forth in the Prospectus. The
Underwriters agree not to offer or sell the Notes in any state or jurisdiction
where registration, qualification or any filing to effect any exemption is
required under such state's or jurisdiction's securities or Blue Sky laws,
except where, with the consent of the Bank (which may be withheld in the
Bank's sole discretion), such registration, qualification or filing has been
completed. To the extent the Underwriters engage in overallotment, stabilizing
transactions, syndicate covering transactions and penalty bids, the
Underwriters agree that such activities shall be in accordance with Regulation
M under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
(b) Each Underwriter severally represents and agrees that (i)
it has not offered or sold and will not offer or sell any Notes to persons in
the United Kingdom except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or
agent) for the purpose of their businesses or otherwise in circumstances which
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have not resulted and will not result in an offer to the public in the United
Kingdom within the meaning of the Public Offers of Securities Regulations 1995;
(ii) it has complied and will comply with all applicable provisions of the
Financial Services Act of 1986 with respect to anything done by it in relation
to the Notes in, from or otherwise involving the United Kingdom; and (iii) it
has only issued or passed on, and will only issue or pass on, in the United
Kingdom any document received by it in connection with the issue of the Notes
to a person who is of a kind described in Article 11(3) of the Financial
Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996 or to a
person to whom such document may otherwise lawfully be issued, distributed or
passed on.
3. Representations and Warranties of the Bank. The Bank
represents and warrants to and agrees with the Underwriters that:
(a) A registration statement on Form S-3 (No. 333-25433),
including a prospectus and such amendments thereto as may have been required to
the date hereof, relating to the Notes and the offering thereof has been filed
with the Securities and Exchange Commission (the "SEC") and such registration
statement, as amended, has become effective under the Securities Act of 1933,
as amended (the "Act"); such registration statement, as amended, including all
information (if any) deemed to be a part of such registration statement as of
the Effective Time (as defined below) pursuant to Rule 430A under the Act, and
including the exhibits thereto and any material incorporated by reference
therein, and the prospectus relating to the sale of the Notes offered thereby
constituting a part thereof, as amended or supplemented, are respectively
referred to herein as the "Registration Statement" and the "Prospectus"; 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, have been satisfied
with respect to the Registration Statement. For purposes of this Agreement,
"Effective Time" means (x) if the Bank has advised the Representative that it
does not propose to amend the Registration Statement, the date and time as of
which the Registration Statement, or the most recent post-effective amendment
thereto (if any) filed prior to the execution and delivery of this Agreement,
was declared effective by the SEC, or (y) if the Bank has advised the
Representative that it proposes to file an amendment or post-effective
amendment to the Registration Statement, the date and time as of which the
Registration Statement, as amended by such amendment or post-effective
amendment, as the case may be, is declared effective by the SEC. "Effective
Date" means the date of the Effective Time.
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(b) On the Effective Date, the Registration Statement, and at
the time of the filing of the Prospectus pursuant to Rule 424(b), the
Registration Statement and the Prospectus, conformed in all material 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 in the
case of the Registration Statement, did not 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 and, in the case of
the Prospectus, did not include any untrue statement of a material fact or 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, the Registration Statement and the Prospectus
conforms in all material respects to the requirements of the Act, the Rules and
Regulations and the Trust Indenture Act, and the Registration Statement does
not 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; the Prospectus does not include any untrue statement of
material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
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 the Bank by any Underwriter
specifically for use therein.
(c) The SEC has not issued and, to the best knowledge of the
Bank, is not threatening to issue any order preventing or suspending the use of
the Registration Statement.
(d) This Agreement has been duly authorized, executed and
delivered by the Bank. The execution, delivery and performance of this
Agreement and the issuance and sale of the Notes and compliance with the terms
and provisions hereof will not result in a breach or violation of any of the
terms and provisions of, or constitute a default under, the organizational
documents or by-laws of the Bank or any agreement or instrument to which the
Bank is a party or by which the Bank is bound or to which any of the properties
of the Bank is subject which could reasonably be expected to have a material
adverse effect on the transactions contemplated herein.
(e) The Bank is duly organized and validly existing as a
national banking association with the power and authority to own its properties
and to conduct its business as such properties are currently owned and such
business is presently
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conducted, except for such power and authority the absence of which would not
have a material adverse effect on the Bank or its ability to consummate the
transactions contemplated hereby.
(f) There are no legal or governmental proceedings pending
or, to the knowledge of the Bank, threatened, against the Bank, or to which
Bank or any of its properties is subject, of a character required to be
disclosed in the Prospectus that are not disclosed in the Prospectus.
(g) All authorizations, consents, orders or approvals of or
registrations or declarations with any court, regulatory body, administrative
agency or other government instrumentality required to be obtained, effected or
given by the Bank in connection with the execution and delivery by the Bank of
this Agreement and the performance by the Bank of the transactions expressly
contemplated by this Agreement, have been duly obtained, effected or given and
are in full force and effect, except such as may be required by the blue sky
laws of any jurisdiction in connection with the sale and distribution of the
Notes for which no representation is being given.
(h) The Bank has all requisite corporate power and
authority to execute and deliver this Agreement and carry out its terms.
(i) The Bank is not required to register as an "investment
company" under the Investment Company Act of 1940, as amended (the "1940 Act")
by reason of the issuance of the Notes.
(j) The representations and warranties made by the Bank as
Transferor in Section 3.1 and Section 6.1 of the Transfer and Servicing
Agreement will be true and correct in all material respects at the time made
and on and as of the Closing Date.
(k) 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 the Bank or any of its subsidiaries any brokerage or
finder's fee or other fee or commission as a result of any of the transactions
contemplated by this Agreement.
4. Agreements of the Bank. The Bank agrees with the
Underwriters as follows:
(a) If the Effective Time is prior to the execution and
delivery of this Agreement, the Bank will file the Prospectus, properly
completed, with the SEC pursuant to and in accordance with subparagraph (1)
(or, if applicable and if
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consented to by the Representative, subparagraph (4)) of Rule 424(b) not later
than the earlier of (i) the second business day following the execution and
delivery of this Agreement and (ii) the fifth business day after the Effective
Date. The Bank will advise the Representative promptly of any such filing
pursuant to Rule 424(b). The Bank will advise the Representative promptly of
any proposal to amend or supplement the Registration Statement or the
Prospectus and will not effect such amendment or supplementation without the
consent of the Representative prior to the Closing Date, and thereafter will
not effect any such amendment or supplementation to which the Representative
reasonably objects; provided, however, except for the Current Report on Form
8-K described in Section 4(m), no consent of the Representative shall be
required in connection with any filing made pursuant to the Exchange Act and
the rules and regulations promulgated thereunder; the Bank will also advise the
Representative promptly of any request by the Commission for any amendment of
or supplement to the Registration Statement or the Prospectus or for any
additional information; and the Bank will also advise the Representative
promptly of the effectiveness of the Registration Statement (if the Effective
Time is subsequent to the execution of this Agreement) and of any amendment or
supplement to the Registration Statement or the Prospectus and of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or known threat of any proceeding for
that purpose and the Bank will use its best efforts to prevent the issuance of
any such stop order and to obtain as soon as possible the lifting of any issued
stop order.
(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 such 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, the Bank
promptly will prepare and file with the SEC, an amendment or supplement to such
Prospectus that will correct such statement or omission or an amendment that
will effect such compliance.
(c) The Bank will immediately inform the Representative (i)
of the receipt by the Bank or the Trust 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 either the Bank
or the Trust is a party relating to the offering or sale of the Notes;
provided, however, with respect to the Trust, the Trust has so informed the
Bank to the extent the Bank did not
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receive such communication provided in clause (i) or is
not a party to the lawsuit or proceeding as provided in clause (ii) and did not
receive notice of such lawsuit.
(d) The Bank will furnish to the Underwriters, without
charge, copies of the Registration Statement (including all documents and
exhibits thereto or incorporated by reference therein), the Prospectus, and all
amendments and supplements to such documents relating to the Notes, in each
case in such quantities as the Underwriters may reasonably request.
(e) No amendment or supplement will be made to the
Registration Statement or Prospectus which the Representative shall not
previously have been advised or to which it shall reasonably object after being
so advised; provided, however, after the Closing Date, excluded from this
provision shall be filings made pursuant to the Exchange Act.
(f) The Bank will cooperate with the Representative and with
its 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
any Underwriter may designate and to which the Bank shall consent and, in such
jurisdictions, will file or cause the Trust to 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 either of the Bank
or the Trust 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) Subject to Section 2, the Bank and the Trust consent 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 the Bank.
(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 a series of Notes is conditional upon the furnishing of
documents or the taking of any other actions by the Bank or the Trust, the Bank
shall cause to be furnished such documents and such other reasonable actions to
be taken.
(i) For two years from the Closing Date, the Bank will
furnish to the Representative (i) as soon as available, a copy of each document
relating to the Trust or the Notes
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required to be filed with the SEC pursuant to the Exchange Act or any order of
the SEC thereunder, and (ii) such other information concerning the Bank or the
Trust as the Representative may reasonably request from time to time insofar as
such information reasonably relates to the Registration Statement or the
transactions contemplated by the Basic Documents.
(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 Underwriter terminating this Agreement pursuant to
Section 8 or Section 9 hereof) or if this Agreement shall be terminated by the
Representative because of any failure or refusal on the part of the Bank to
comply with the terms or fulfill any of the conditions of this Agreement, the
Bank agrees to reimburse the Underwriters for all out-of-pocket expenses
(including reasonable fees and expenses of their counsel) reasonably incurred
in connection herewith. In no event shall the Bank or the Trust be liable to
the Underwriters for loss of anticipated profits from the transactions
contemplated by this Agreement.
(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.
(l) Except as stated in this Agreement and in the Prospectus
the Bank 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; it being understood and agreed that no such action by
any Underwriter shall be deemed an action of the Bank.
(m) Provided that the Bank has received the Computational
Materials (as defined in Section 8 below) within the time frame set forth in
Section 8, the Bank will cause such Computational Materials to be filed with
the SEC on a Current Report on Form 8-K (the "Current Report") not later than
the date on which the Prospectus is available for distribution to investors.
(n) For the period beginning on the date of this Agreement
and ending 90 days after the Closing Date, neither the Bank nor any trust
originated, directly or indirectly, by the Bank will, without the prior written
consent of the Representative, offer to sell or sell notes (other than the
Notes) collateralized by, or certificates evidencing an ownership interest in,
student loans; provided, however, that this shall not be construed to prevent
the sale of student loans by the Bank.
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5. Indemnification and Contribution. (a) The Bank agrees to
indemnify and hold harmless each Underwriter 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 (including reasonable costs of investigation) 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 the preliminary prospectus dated
__________, 1997 (the "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, 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
the Underwriter furnished in writing to the Bank by or on behalf of any
Underwriter through the Representative expressly for use in connection
therewith; provided, however, that the foregoing indemnity with respect to the
Prospectus or the Preliminary Prospectus shall not inure to the benefit of any
Underwriter (or any person controlling such Underwriter) from whom the person
asserting any such loss, claim, damage or liability purchased Notes, if such
person did not receive a copy of the Prospectus (as then amended or
supplemented) at or prior to the written confirmation of the sale of such Notes
to such person and if the Prospectus (as so amended or supplemented) would have
cured the defect giving rise to such loss, claim, damage or liability. The
foregoing indemnity agreement shall be in addition to any liability which the
Bank 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 the Bank, such Underwriter or such
controlling person shall promptly notify the parties against whom
indemnification is being sought (the "indemnifying parties"), and such
indemnifying parties shall assume the defense thereof, including the employment
of counsel and payment of all reasonable fees and expenses. Such 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 the
Underwriter or such controlling person unless (i) the indemnifying parties have
agreed in writing to pay such fees and expenses, (ii) the indemnifying parties
have failed to assume the defense and employ counsel within a reasonable period
of time, or (iii) the named parties to any such action, suit or
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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
representation of such indemnified party and any indemnifying party by the same
counsel would be inappropriate under applicable standards of professional
conduct (whether or not such representation by the same counsel has been
proposed) due to actual or potential differing interests between them (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 the Underwriter
and controlling persons not having actual or potential differing interests with
the Underwriter or among themselves, which firm shall be designated in writing
by the Underwriter, and that all such fees and expenses shall be reimbursed on
a monthly basis as provided in paragraph (a) hereof. The indemnifying parties
shall not be liable for any settlement of any such action, suit or proceeding
effected without their written consent, but if settled with such written
consent, or if there be a final judgment for the plaintiff in any such action,
suit or proceeding, the indemnifying parties agree to indemnify and hold
harmless the Underwriter and any such controlling person from and against any
loss, claim, damage, liability or expense by reason of such settlement or
judgment to the extent provided in paragraph (a).
(c) Each Underwriter agrees severally but not jointly to
indemnify and hold harmless the Bank and its respective directors and officers,
and any person who controls the Bank within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act to the same extent as the indemnity from
the Bank to such Underwriter set forth in paragraph (a) hereof, but only with
respect to information relating to such Underwriter furnished in writing by or
on behalf of such Underwriter through the Representative expressly for use in
the Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus. If any action, suit or
proceeding shall be brought against the Bank, 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 the Bank by paragraph (b) above
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(except that if the Bank shall have assumed the defense thereof no Underwriter
shall 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, except as otherwise provided in
paragraph (b) above), and the Bank, its respective directors and officers, and
any such controlling person shall have the rights and duties given to such
Underwriter by paragraph (b) above. The foregoing indemnity agreement shall be
in addition to any liability which the Underwriters may otherwise have.
(d) If the indemnification provided for in this Section 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
the Bank 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 the Bank on the one hand and such 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 the Bank on the one
hand and such 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 Bank bear to the total underwriting
discounts and commissions received by such Underwriter. The relative fault of
the Bank on the one hand and such Underwriter 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 the Bank on the one
hand or by such 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) The Bank 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
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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 underwriting discounts and commissions applicable to the Notes hereunder
and, in the case of ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., plus the structuring fee referred to in
Section 1. 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.
(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 the Bank 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 an Underwriter, the Bank 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 any Underwriter, the Bank 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:
(a) All actions required to be taken and all filings required
to be made by the Bank 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 the Bank or the Underwriters, shall be threatened by the SEC.
(b) Subsequent to the effective date of this Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting the condition (financial or other),
business, properties, net worth, or results of operations of the Bank not
contemplated by the Registration Statement, which in the opinion of the
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Representative, would materially adversely affect the market for the Notes, or
(ii) any event or development which makes any statement made in the
Registration Statement or Prospectus untrue in any material respect or which,
in the opinion of the Bank 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
Representative, materially adversely affect the market for the Notes.
(c) The Representative shall have received on the Closing
Date an opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, special Delaware counsel for the
Trust, dated the Closing Date and addressed to the Underwriters, in form and
scope reasonably satisfactory to the Representative and its counse1 and
substantially in the form of Exhibit A hereto.
(d) The Representative shall have received on the Closing
Date opinions of ▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, special counsel for the Bank, dated
the Closing Date and addressed to the Underwriters and B-2, in form and scope
reasonably satisfactory to the Representative and its counse1 and substantially
in the form of Exhibit B hereto.
(e) The Representative shall have received on the Closing
Date an opinion of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., General Counsel-Consumer Bank of PNC
Bank Corp., dated the Closing Date and addressed to the Underwriters, in form
and scope reasonably satisfactory to the Representative and its counse1 and
substantially in the form of Exhibit C hereto.
(f) The Representative shall have received on the Closing
Date an opinion of the Law Department of the Eligible Lender Trustee, dated the
Closing Date and addressed to the Underwriters, in form and scope reasonably
satisfactory to the Representative and its counse1 and substantially in the
form of Exhibit D hereto.
(g) The Representative shall have received on the Closing
Date an opinion of ▇▇▇▇▇ & Case, counsel for the Indenture Trustee, dated the
Closing Date and addressed to the Underwriters, in form and scope satisfactory
to the Representative and its counse1 and substantially in the form of Exhibit
E hereto.
(h) The Representative shall have received on the Closing
Date an opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP,
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special counsel for the Underwriters, dated the Closing Date, and addressed to
the Underwriters, in form and scope Satisfactory to the Representative and its
counse1 and substantially in the form of Exhibit F hereto.
(i) The Representative shall have received on the Closing
Date opinions of ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, counsel for the Bank, dated the Closing
Date and addressed to the Underwriters , in form and scope reasonably
satisfactory to the Representative and its counse1 and substantially in the
form of Exhibits G-1 and G-2 hereto.
(j) The Representative shall have received a letter dated the
date of delivery thereof (which shall be on or prior to the date of this
Agreement) from Ernst & Young LLP, and in form and substance reasonably
satisfactory to the Representative, to the effect that they have carried out
certain specified procedures, not constituting an audit, with respect to
certain information regarding the Financed Student Loans and setting forth the
results of such specified procedures.
(k) There shall not have been, since the respective dates as
of which information is given in the Registration Statement (or any amendment
or supplement thereto), except as may otherwise be stated therein or
contemplated thereby, any material adverse change in the condition (financial
or other), business, prospects, properties, net worth or results of operations
of the Bank, and (ii) all the representations and warranties of the Bank
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 Representative
shall have received a certificate, dated the Closing Date and signed by an
executive officer of the Bank, to the effect set forth in this Section 6(k) and
in Section 6(l) hereof.
(l) The Bank shall not have failed at or prior to the Closing
Date to have performed or complied in any material respect 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.
(m) The Representative shall have received by instrument
dated the Closing Date (at the option of the Representative), in lieu of or in
addition to the opinions referred to in clauses (c) through (i) of this Section
(6), the right to rely on opinions provided by such counsel and all other
counsel under the terms of the Basic Documents to ▇▇▇▇▇'▇ Investors Service,
Inc. ("▇▇▇▇▇'▇"), Standard & Poor's Ratings Services ("Standard & Poor's") and
Fitch Investor's Service, L.P. ("Fitch").
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(n) Moody's, Standard & Poor's and Fitch shall have rated the
Class A-1 Notes "P-1", "A-1+" and "F-1", respectively, and each other Class of
the Class A Notes "Aaa", "AAA" and "AAA", respectively, and Moody's, Standard &
Poor's and Fitch shall have rated the Class B Notes at least "A2," "A" and "A,"
respectively, and there shall not have been any announcement by Moody's,
Standard & Poor's or Fitch that (i) it is downgrading any of its ratings
assigned to any Class of Notes or (ii) it is reviewing its ratings assigned to
any Class of Notes with a view to possible downgrading, or with negative
implications, or direction not determined.
(o) The Bank shall have furnished or caused to be furnished
to the Representative an executed copy of each of the Basic Documents, each
Guaranty Agreement, each Subservicing Agreement and such further certificates
and documents as the Representative shall have reasonably requested.
(p) The Representative shall have received evidence
satisfactory to it 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 Commonwealth of Pennsylvania reflecting the transfer of the interest of
the Bank in the Financed Student Loans to the Eligible Lender Trustee on behalf
of the Trust and the proceeds thereof to the Trust and in the offices of the
Secretaries of State of the States of Illinois and Delaware reflecting the
grant of the security interest by the Trust in the Financed Student Loans and
the proceeds thereof to the Indenture Trustee.
All such opinions, certificates, letters and other documents
will be in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to the Representative and counsel for the
Representative.
7. Expenses. The Bank 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 and the Trust of their respective obligations
hereunder: (i) the preparation, printing or reproduction of the Registration
Statement, each 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, each
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
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for the Notes; (iv) the printing (or reproduction) and delivery of this
Agreement, the Blue Sky Memorandum 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 such states as the Bank and the Representative may agree (including
the reasonable fees, expenses and disbursements of counsel for the Underwriters
relating to the preparation, printing or reproduction, and delivery of any Blue
Sky Memorandum prepared in connection with such qualification); (vii) the fees
and disbursements of (A) the Bank's counsel, (B) the Representative's counsel
(in an amount not to exceed $________ without the consent of the Bank), (C) the
Indenture Trustee and its counsel, (D) the Eligible Lender Trustee, (E) the
Depository Trust Company in connection with the book-entry registration of the
Notes, (F) Ernst & Young LLP, accountants for the Bank and issuer of the
letters described in Section 6(j), (G) ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ and Finger, Special
Delaware Counsel to the Bank in connection with the preparation of the opinion
referred to in Section 6(c) and (H) ▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, special counsel to
the Bank in connection with the preparation of the opinion referred to in
Section 6(d); (viii) the fees charged by Moody's and Standard & Poor's for
rating the Notes and (ix) the reasonable travel and other out-of-pocket
expenses incurred by the Representative in connection with the transactions
contemplated hereby.
8. Computational Materials. (a) Not later than 10:30 a.m. New
York City time, on the Business Day before the date on which the Current Report
relating to the Notes is required to be filed by the Bank with the SEC pursuant
to Section 4(m) hereof, each Underwriter shall deliver to the Bank a complete
copy of all materials, if any, provided by such Underwriter to prospective
investors in such Notes which constitute "Computational Materials" within the
meaning of the no-action letter dated May 20, 1994 issued by the Division of
Corporation Finance of the SEC to ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Acceptance Corporation I,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & Co. Incorporated, and ▇▇▇▇▇▇ Structured Asset Corporation,
the no-action letter dated May 27, 1994 issued by the Division of Corporation
Finance of the SEC to the Public Securities Association and the no-action
letter of February 17, 1995 issued by the SEC to the Public Securities
Association (collectively, the "▇▇▇▇▇▇/PSA Letters") and the filing of which is
a condition of the relief granted in such letters (such materials being the
"Computational Materials").
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Each Underwriter severally and not jointly represents and
warrants to and agrees with the Bank, as of date hereof and as of the Closing
Date, that the Computational Materials furnished to the Bank by such
Underwriter pursuant to Section 8(a) constitute (either in original, aggregated
or consolidated form) all of the materials furnished to prospective investors
in the Notes by such Underwriter prior to the time of delivery thereof to the
Bank that are required to be filed with the SEC with respect to the Notes in
accordance with the ▇▇▇▇▇▇/PSA Letters and such Computational Materials comply
with the requirements of the ▇▇▇▇▇▇/PSA Letters.
Notwithstanding the foregoing, such Underwriter makes no
representation or warranty with respect to statements in any Computational
Materials relating to the Financed Student Loans which were furnished by or on
behalf of the Bank to such Underwriter.
9. Default by One of the Underwriters. If any of the
Underwriters shall fail at 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 Underwriters shall have not
completed such arrangements within such one (1) Business Day period, then this
Agreement shall terminate without liability on the part of the Non-Defaulting
Underwriters.
No action taken pursuant to this Section 9 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 Underwriter or the
Bank 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.
10. Effective Date of Agreement. This Agreement shall become
effective 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 the Bank, by notifying the Representative, or by the
Representative, by notifying the Bank.
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Any notice under this Section 8 may be given by telegram,
telecopy or telephone but shall be subsequently confirmed by letter.
11. Termination of Agreement. This Agreement shall be subject
to termination in the absolute discretion of the Representative, without
liability on the part of any Underwriter, by notice to the Bank, if prior to
the Closing Date, (i) trading in securities generally on the New York Stock
Exchange 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 New York state authorities, (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 reasonable judgment of the Representative,
impracticable or inadvisable to commence or continue the offering of the Notes
on the terms set forth in the Prospectus, or to enforce contracts for the
resale of the Notes by the Underwriters, (iv) legislation shall be enacted by
the Congress of the United States or a decision by a court of the United States
or the Tax Court of the United States shall be rendered, or an officially
published ruling, regulation, proposed regulation or official statement by or
on behalf of the Treasury Department of the United States, the Internal Revenue
Service or any other governmental agency shall be made, with respect to federal
taxation upon revenues or other income of the general character expected to be
pledged under the Indenture or upon interest received on securities of the
general character of the Notes, or which would have the effect of changing,
directly or indirectly, the federal income tax consequences of interest on
securities of the general character of the Notes in the hands of the holders
thereof, which in the opinion of counsel to the Representative materially
affects the market price of the Notes, or (v) legislation shall be enacted by
the States of Delaware or Illinois or the Commonwealth of Pennsylvania, or a
decision by a court of competent jurisdiction of the States of Delaware or
Illinois or the Commonwealth of Pennsylvania or any administrative tribunal of
the States of Delaware or Illinois or the Commonwealth of Pennsylvania or other
governmental agency or department thereof shall be rendered with respect to
taxation by the States of Delaware or Illinois or the Commonwealth of
Pennsylvania or any of their political subdivisions upon revenues or other
income of the general character expected to be pledged under the Indenture or
upon interest received on securities of the general character of the Notes, or
which would have the effect of changing, directly or indirectly, the tax
consequences under the States of Delaware or Illinois or the Commonwealth of
Pennsylvania tax law of interest on securities of the general character of the
Notes in the hands of the
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holders thereof, which in the opinion of counsel to the Representative
materially affects the market price of the Notes. Notice of such termination
may be given to the Bank, by telegram, telecopy or telephone and shall be
subsequently confirmed by letter.
12. Information Furnished by the Underwriter. The statements
set forth in the second sentence of the fourth from last paragraph on the cover
page, the second sentence under the subsection "Risk Resulting From Limited
Liquidity of the Notes" under the heading "Risk Factors" and under the heading
"Underwriting" in the Preliminary Prospectus and the Prospectus 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, and each Underwriter
confirms that such statements relating to such Underwriter are correct.
13. Representation of Underwriters. The Representative shall
act for the several Underwriters in connection with this financing, and any
action under this Agreement taken by the Representative will be binding upon
all the Underwriters.
14. Miscellaneous. Except as otherwise provided in Sections
4, 10 and 11 hereof, notice given pursuant to any provision of this Agreement
shall be in writing and shall be delivered (i) if to the Bank, two copies, one
to PNC Bank, National Association, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Mr. ▇▇▇▇ ▇▇▇▇▇▇; facsimile: (▇▇▇) ▇▇▇-▇▇▇▇, with
a copy to PNC Bank, National Association, One PNC Plaza, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Esq.; Senior Vice
President and General Counsel; facsimile (▇▇▇) ▇▇▇-▇▇▇▇, (ii) if to the Trust,
to the Eligible Lender Trustee, at the Corporate Trust Office of the Eligible
Lender Trustee and (iii) if to the Representative, to ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Debt Organization Group;
facsimile (▇▇▇) ▇▇▇-▇▇▇▇.
This Agreement has been and is made solely for the benefit of
the Underwriters and the Bank, their respective directors, officers, 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 any Underwriter of any of the Notes in
its status as such purchaser.
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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.
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.
16. Effect on Letter Agreement. This Agreement supersedes
that certain letter agreement dated as of March 18, 1997, between ▇▇▇▇▇ ▇▇▇▇▇▇
Inc. and PNC Bank Corp., except for Section 5 thereof relating to the
confidentiality obligations of such parties which survives.
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Please confirm that the foregoing correctly sets forth the
agreement among the Bank, the Trust and the Underwriters.
Very truly yours,
PNC BANK, NATIONAL ASSOCIATION
By:
-----------------------------------
Name:
Title:
PNC STUDENT LOAN TRUST I
By: THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity but
solely as Eligible Lender Trustee
on behalf of the Trust,
By:
-----------------------------------
Name:
Title:
Confirmed as of the date first above mentioned.
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By:
--------------------------------
Name:
Title:
Acting on behalf of itself and as
Representative of the several
Underwriters.
Confirmed with respect to Section 16 only as of
the date first above mentioned.
PNC BANK CORP.
By:
--------------------------------
Name:
Title:
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SCHEDULE I
Underwriters
▇▇▇▇▇ ▇▇▇▇▇▇ PNC Capital
Underwriter Inc. Markets, Inc. Total
Class A-1................................... $_______________ $_______________ $ 90,000,000
Class A-2................................... $_______________ $_______________ $107,000,000
Class A-3................................... $_______________ $_______________ $107,000,000
Class A-4................................... $_______________ $_______________ $102,000,000
Class A-5................................... $_______________ $_______________ $ 94,000,000
Class A-6................................... $_______________ $_______________ $ 72,500,000
Class A-7................................... $_______________ $_______________ $121,000,000
Class A-8................................... $_______________ $_______________ $175,000,000
Class A-9................................... $_______________ $_______________ $125,450,000
Class B..................................... $_______________ $_______________ $ 36,050,000
