EXHIBIT 1.1
[Form of Underwriting Agreement]
EFG FUNDING CORPORATION
EFG Student Loan Trust _________-___
UNDERWRITING AGREEMENT
_______________, 1999
▇▇▇▇▇▇ BROTHERS INC.
Three World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Ladies and Gentlemen:
EFG Funding Corporation (the "Company") is a Delaware corporation
with its principal place of business in Hyannis, Massachusetts. The Company has
filed a Registration Statement relating to the issuance and sale of student
loan-backed notes (the "Notes") and student loan-backed certificates (the
"Certificates" and, together with the Notes, the "Securities"). The Notes will
represent obligations of, and the Certificates will evidence beneficial
interests in, separate EFG Student Loan Trusts (each, a "Trust"). The Notes and
Certificates may be issued in various series, and, within each series, in one
or more classes, and, within each class, in one or more sub classes, in one or
more offerings on terms determined at the time of sale (each such series, a
"Series" and each such class, a "Class"). The Notes with respect to a Series
will be issued under an indenture (the "Indenture") between the Trust and a
trustee to be identified in the prospectus supplement (the "Indenture
Trustee"). The Certificates with respect to a Series will be issued under a
trust agreement (the "Trust Agreement") among the Company, as depositor (the
"Depositor"), a trustee to be identified in the prospectus supplement (the
"Owner Trustee") and any other party which may be identified in the prospectus
supplement.
The property of each Trust with respect to a Series (the "Trust
Property") will include among other things, a pool of student loans (the
"[Initial] Financed Student Loans") and certain monies due thereunder on and
after the applicable Cutoff Date. The Company will acquire the [Initial]
Financed Student Loans pursuant to a loan sale agreement (the "Loan Sale
Agreement")
between EFG Financial Group, Inc. ("EFG"), as seller (the "Seller"), the
Company, as purchaser, the EFG Eligible Lender Trustee (as defined below) and
the Eligible Lender Trustee (as defined below). Such [Initial] Financed Student
Loans will be sold to the Trust by the Company pursuant to a transfer agreement
(the "Transfer Agreement") among the Trust, the Company and the Eligible Lender
Trustee. With respect to Financed Student Loans that constitute FFELP Loans,
The First National Bank of Chicago will hold legal title as eligible lender
trustee on behalf of the Seller under the Loan Sale Agreement (in such
capacity, the "EFG Eligible Lender Trustee") and as eligible lender trustee on
behalf of the Company and the Trust (in such capacity, the "Eligible Lender
Trustee") under an Eligible Lender Trust Agreement. [Under certain
circumstances after the Closing Time (as defined below), the Eligible Lender
Trustee, acting on behalf of the Trust, may acquire additional student loans
("Additional Acquired Student Loans"; the [Initial] Financed Student Loans and
the Additional Acquired Student Loans being referred to herein, collectively,
as the "Financed Student Loans")]. The Financed Student Loans are to be
serviced by EFG Technologies, Inc., a Delaware corporation (the "Servicer")
pursuant to a servicing agreement (the "Servicing Agreement"), among the Trust,
the Servicer, the Seller and the Eligible Lender Trustee. Forms of the
Indenture, Trust Agreement, the Guarantee Agreement, Loan Sale Agreement,
Transfer Agreement and Servicing Agreement have been filed as exhibits to the
Registration Statement (hereinafter defined).
The Securities are more fully described in a Registration Statement
which the Company has furnished to you. Capitalized terms used but not defined
herein shall have the meanings given to them in the Registration Statement. The
term "you" as used herein, unless the context otherwise requires, shall mean
you and any such persons as are named as co managers in the Terms Agreement
(defined below).
Each offering of Securities pursuant to this Agreement will be made
through you or through an underwriting syndicate managed by you. Whenever the
Company determines to make an offering of Securities, it will enter into an
agreement (the "Terms Agreement") providing for the sale of such Securities to,
and the purchase and offering thereof by, you and such other underwriters, if
any, selected by you and have authorized you to enter into such Terms Agreement
on their behalf (the "Underwriters," which term shall include you whether
acting alone in the sale of Securities or as a member of an underwriting
syndicate). The Terms Agreement relating to each offering of Securities shall
specify, among other things, the principal amount or amounts of the Securities
to be issued, the price or prices at which the Securities are to be purchased
by the Underwriters from the Company and the initial public offering price or
prices or the method by which the price or prices at which such Securities are
to be sold will be determined. A Terms Agreement, which shall be substantially
in the form of Exhibit A hereto, may take the form of an exchange of any
standard form of written telecommunication between you and the Company. Each
offering of Securities will be governed by this Agreement, as supplemented by
the applicable Terms Agreement, and this Agreement and such Terms Agreement
shall inure to the benefit of and be binding upon the Underwriters
participating in the offering of such Securities.
The Company has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (File No. 333-64009)
(the "Registration Statement"), relating to the offering of Securities from
time to time in accordance with Rule 415 under the Securities Act of 1933, as
amended (the "1933 Act"), and has filed, and proposes to file, such
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amendments thereto as may have been required to the date hereof pursuant to the
1933 Act and the rules of the Commission thereunder (the "Regulations"). Such
Registration Statement, as amended at the time when it became effective under
the 1933 Act, and the Prospectus relating to the sale of Securities by the
Company constituting a part thereof, as from time to time each is amended or
supplemented pursuant to the 1933 Act or otherwise, are referred to herein as
the "Registration Statement" and the "Prospectus", respectively; provided,
however, that the supplement to the Prospectus contemplated by Section 3(a)
hereof (a "Prospectus Supplement") shall be deemed to have supplemented the
Prospectus only with respect to the Securities to which it relates.
Section 1. Representations and Warranties of Company. The Company and
the Depositor represent and warrant to you as of the date hereof, and to the
Underwriters named in the Terms Agreement, all as of the date of such Terms
Agreement (in each case, the "Representation Date"), as follows:
(a) The Registration Statement has become effective under the
1933 Act, as amended. No stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings
for that purpose have been initiated or, to the knowledge of the
Company, threatened by the Commission.
(b) The Registration Statement and the Prospectus, at the time
the Registration Statement became effective did, and as of the
applicable Representation Date will, comply in all material
respects with the requirements of the 1933 Act and the
Regulations. The Registration Statement, at the time it became
effective did not, and as of the applicable Representation Date
will not, contain 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, as amended or supplemented at the time the
Registration Statement became effective did not, and as amended
or supplemented as of the applicable Representation Date will
not, contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading. The conditions to the use by the Company
of a registration statement on Form S-3 under the 1933 Act, as
set forth in the General Instructions to Form S-3, have been
satisfied with respect to the Registration Statement, as
applicable, and the Prospectus. There are no contracts or
documents of the Company which are required to be filed as
exhibits to the Registration Statement pursuant to the 1933 Act
or the Regulations which have not been so filed.
(c) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware with corporate power and authority to own,
lease and operate its properties and conduct its business as
described in the Prospectus and to enter into and perform its
obligations under this Agreement, the Terms Agreement, the Trust
Agreement, the Loan Sale Agreement and the Transfer Agreement,
and the Company is duly qualified as a foreign corporation to
transact business and is in good standing in
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each jurisdiction in which the ownership or lease of its properties or the
conduct of its business requires such qualification.
(d) The Company is not in violation of its certificate of
incorporation or by laws or in default in the performance or
observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement,
note, lease or other instrument to which it is a party or by
which it or its properties may be bound, which default might
result in any material adverse change in the financial
condition, earnings, affairs or business of the Company, or
which might materially and adversely affect the properties or
assets thereof.
(e) The execution and delivery by the Company of this Agreement,
the Terms Agreement, the Trust Agreement, the Loan Sale
Agreement and the Transfer Agreement are within the corporate
power of the Company and have been duly authorized by all
necessary corporate action on the part of the Company; and
neither the issuance and sale of the Securities to the
Underwriters, nor the execution and delivery by the Company of
this Agreement, the Terms Agreement, the Trust Agreement, Loan
Sale Agreement and the Transfer Agreement, nor the consummation
by the Company of the transactions therein contemplated, nor
compliance by the Company with the provisions hereof or thereof,
will materially conflict with or result in a material breach of,
or constitute a material default under, any of the provisions of
any law, governmental rule, regulation, judgment, decree or
order binding on the Company or its properties or the
certificate of incorporation or by laws of the Company, or any
of the provisions of any indenture, mortgage, contract or other
instrument to which the Company is a party or by which it is
bound or result in the creation or imposition of any lien,
charge or encumbrance upon any of its property pursuant to the
terms of any such indenture, mortgage, contract or other
instrument.
(f) This Agreement has been, and the Terms Agreement when
executed and delivered as contemplated hereby and thereby will
have been, duly authorized, executed and delivered by the
Company, and each constitutes, or will constitute when so
executed and delivered, a legal, valid and binding instrument
enforceable against the Company in accordance with its terms.
(g) The Trust Agreement, Loan Sale Agreement and the Transfer
Agreement when executed and delivered as contemplated hereby and
thereby will have been duly authorized, executed and delivered
by the Company, and will constitute when so executed and
delivered, a legal, valid and binding instrument enforceable
against the Company in accordance with its terms.
(h) As of the Closing Time, the Notes will have been duly and
validly authorized by the Trust, and, when executed and
authenticated as specified in the Indenture, will be validly
issued and outstanding and will be entitled to the benefits of
the Indenture, and will be binding obligations of the Trust to
the extent provided in the Indenture.
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(i) As of the Closing Time, the Certificates will have been duly
and validly authorized by the Trust, and, when executed and
authenticated as specified in the Trust Agreement, will be
validly issued and outstanding and will be entitled to the
benefits of the Trust Agreement, and will be binding obligations
of the Trust to the extent provided in the Trust Agreement.
(j) No filing or registration with, notice to or consent,
approval, authorization or order of any court or governmental
authority or agency is required for the consummation by the
Company of the transactions contemplated by this Agreement, the
Terms Agreement, the Trust Agreement, the Loan Sale Agreement or
the Transfer Agreement, except such as may be required under the
1933 Act or the Regulations.
(k) The Company possesses all material licenses, certificates,
authorities or permits issued by the appropriate state, federal
or foreign regulatory agencies or bodies necessary to conduct
the business now operated by it and as described in the
Prospectus, and the Company has received no notice of
proceedings relating to the revocation or modification of any
such license, certificate, authority or permit which, singly or
in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would materially and adversely affect the
business, operations, financial condition or earnings of the
Company.
(l) At the time of execution and delivery of the Loan Sale
Agreement (1) the EFG Eligible Lender Trustee on behalf of the
Seller will own the Initial Financed Student Loans free and
clear of any lien, mortgage, security interest, pledge, charge
or other encumbrance (collectively, "Liens"), except to the
extent permitted in the Loan Sale Agreement, and will not have
assigned to any person other than the Company any of its right,
title or interest in such Student Loans, and (2) the Seller will
have the power and authority to pledge the Initial Financed
Student Loans to the Company and will have duly authorized such
action by all necessary corporate action.
(m) At the time of execution and delivery of the Transfer
Agreement (1) the Eligible Lender Trustee on behalf of the
Company will own the Initial Financed Student Loans free and
clear of any Liens, except to the extent permitted in the
Transfer Agreement, and will not have assigned to any person
other than the Trust any of its right, title or interest in such
Student Loans, (2) the Company will have the power and authority
to pledge the Initial Financed Student Loans to the Trust and
will have duly authorized such action by all necessary corporate
action and (3) as of the Closing Time, the Initial Financed
Student Loans will have been duly and validly assigned to the
Trust in accordance with the Transfer Agreement and granted to
the Indenture Trustee under the Indenture; and when such grant
is effected, a duly and validly perfected transfer of all such
Student Loans subject to no prior lien, mortgage, security
interest, pledge, charge or other encumbrance created by the
Seller, the Company, the EFG Eligible Lender Trustee or the
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Eligible Lender Trustee will have occurred in favor of the Trust
and the Indenture Trustee will hold a first priority perfected
security interest in such Student Loans.
(n) Any taxes, fees and other governmental charges in connection
with the execution, delivery and issuance of this Agreement, the
Terms Agreement, the Loan Sale Agreement and Transfer Agreement
and the Securities have been or will be paid by or on behalf of
the Company or the Trust on or prior to the Closing Time.
(o) As of the Closing Time, each of the Initial Financed Student
Loans will meet the eligibility criteria described in the
Prospectus and applicable Prospectus Supplement.
(p) There are no pending or threatened litigation or
administrative proceedings of or before any court, tribunal or
governmental agency, authority or body or any arbitrator which,
if adversely determined, would have a material adverse effect on
the issuance of the Securities or the financial condition of the
Company.
(q) Neither the Company nor the Trust will be subject to
registration as an "investment company" under the Investment
Company Act of 1940, as amended (the "1940 Act").
(r) The Securities, the Indenture, the Trust Agreement, the Loan
Sale Agreement, the Transfer Agreement, the Servicing Agreement
and the Terms Agreement conform in all material respects to the
descriptions thereof contained in the Prospectus.
(s) The representations and warranties of the Company in the
Transfer Agreement and the Trust Agreement and of the Seller in
the Loan Sale Agreement will be true and correct in all material
respects as of the Closing Time and as of any other date as of
which they are made pursuant to the terms thereof.
(t) As of the Closing Time, the Securities shall have been rated
as described under "Summary of Terms Rating of the Securities"
in the Prospectus Supplement.
Any certificate signed by an officer of the Company and delivered to
the Underwriters or counsel for the Underwriters in connection with an offering
of the Securities shall be deemed, and shall state that it is, a representation
and warranty as to the matters covered thereby to each person to whom the
representations and warranties in this Section 1 are made.
Section 2. Purchase and Sale. The commitment of the Underwriters to
purchase Securities pursuant to any Terms Agreement shall be deemed to have
been made on the basis of the representations and warranties herein contained
and shall be subject to the terms and conditions herein set forth.
Payment of the purchase price for, and delivery of, any Securities to
be purchased by the Underwriters shall be made at the office of [▇▇▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
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▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇], or at such other place as shall be agreed upon by you
and the Company, at such time or date as shall be agreed upon by you and the
Company in the Terms Agreement (each such time and date being referred to as a
"Closing Time"). Unless otherwise specified in the Terms Agreement, payment
shall be made to the Company, at the option of the Company, either (a) by
certified or official bank check or checks in New York Clearing House or
similar next day funds payable to the order of the Company, or (b) in
immediately available federal funds wired to such bank as may be designated by
the Company; provided, however, that if payment is made in immediately
available federal funds if so specified in the Terms Agreement, the Company
shall simultaneously reimburse the Underwriters for the cost to the
Underwriters of such funds, based on the Underwriters' cost of borrowing such
funds for one day at their most favorable commercial paper rate at the Closing
Time. Such Securities shall be in such denominations and registered in such
names as you may request in writing at least two business days prior to the
applicable Closing Time. Such Securities, which may be in temporary form, will
be made available for examination and packaging by you no later than 12:00 noon
on the first business day prior to the applicable Closing Time.
Section 3. Covenants of Company. The Company covenants with each of
you and the Underwriters participating in the applicable offering of
Securities, as follows:
(a) Immediately following the execution of the Terms Agreement,
the Company will prepare a Prospectus Supplement setting forth
the principal amount of the Securities covered thereby, the
price or prices at which the Securities are to be purchased by
the Underwriters from the Trust, either the initial public
offering price or prices or the method by which the price or
prices by which the Securities are to be sold will be
determined, the selling concession(s) and reallowance(s), if
any, any delayed delivery arrangements, and such other
information as you and the Company deem appropriate in
connection with the offering of the Securities. The Company will
promptly transmit copies of the Prospectus Supplement to the
Commission for filing pursuant to Rule 424 under the 1933 Act
and will furnish to the Underwriters as many copies of the
Prospectus and such Prospectus Supplement as you shall
reasonably request.
(b) If at any time when the Prospectus is required by the 1933
Act to be delivered in connection with sales of the Securities
by you or the Underwriters, any event shall occur or condition
exist as a result of which it is necessary, in the opinion of
your counsel, counsel for the Company, or otherwise, to further
amend or supplement the Prospectus in order that the Prospectus
will not include an untrue statement of a material fact or omit
to state any material fact necessary to make the statements
therein, in the light of circumstances existing at the time it
is delivered to a purchaser, not misleading or if it shall be
necessary, in the opinion of any such counsel or otherwise, at
any such time to amend or supplement the Registration Statement
or the Prospectus in order to comply with the requirements of
the 1933 Act or the Regulations thereunder, the Company will
promptly prepare and file with the Commission such amendment or
supplement as may be necessary to correct such untrue statement
or omission or to make the Registration Statement comply with
such requirements, and within two business days will
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furnish to the Underwriters as many copies of the Prospectus, as
so amended or supplemented, as you shall reasonably request.
(c) The Company will give you reasonable notice of its intention
to file any amendment to the Registration Statement or any
amendment or supplement to the Prospectus, whether pursuant to
the 1933 Act or otherwise (other than reports to be filed
pursuant to the Securities Exchange Act of 1934 Act, as amended
(the "1934 Act")), will furnish you with copies of any such
amendment or supplement or other documents proposed to be filed
a reasonable time in advance of filing, and will not file any
such amendment or supplement or other documents in a form to
which you or your counsel shall object.
(d) The Company will notify you immediately, and confirm the
notice in writing, (i) of the effectiveness of any amendment to
the Registration Statement, (ii) of the mailing or the delivery
to the Commission for filing of any supplement to the Prospectus
or any document, other than reports to be filed pursuant to the
1934 Act, (iii) of the receipt of any comments from the
Commission with respect to the Registration Statement, the
Prospectus or any Prospectus Supplement, (iv) of any request by
the Commission for any amendment to the Registration Statement
or any amendment or supplement to the Prospectus or for
additional information, and (v) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or suspension of the qualification of the
Securities or the initiation of any proceedings for that
purpose. The Company will make every reasonable effort to
prevent the issuance of any such stop order or suspension and,
if any such stop order or suspension is issued, to obtain the
lifting thereof at the earliest possible moment.
(e) The Company will deliver to you as many signed and as many
conformed copies of the Registration Statement (as ordinarily
filed) and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein and documents
incorporated by reference in the Prospectus) as you may
reasonably request.
(f) The Company will endeavor, in cooperation with you, to
qualify the Securities for offering and sale under the
applicable securities laws of such states and other
jurisdictions of the United States as you may designate, and
will maintain or cause to be maintained such qualifications in
effect for as long as may be required for the distribution of
the Securities. The Company will file or cause the filing of
such statements and reports as may be required by the laws of
each jurisdiction in which the Securities have been qualified as
above provided.
(g) The Company will file with the Commission within fifteen
days of the issuance of the Securities a current report on Form
8-K setting forth specific information concerning the Securities
and the Student Loans to the extent that such information is not
set forth in the Prospectus. The Company will also file with the
Commission a current report on Form 8-K setting forth all
Computational
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Materials, ABS Term Sheets and Collateral Term Sheets (each as
defined in Section 5 hereof) provided to the Company by any
Underwriter within the applicable time periods allotted for such
filing pursuant to the No-Action Letters (as defined in Section
5 hereof).
(h) In connection with any Computational Materials, ABS Term
Sheets or Collateral Term Sheets provided by an Underwriter
pursuant to Section 5, the Company must receive a letter from
nationally recognized firm of certified public accountants
satisfactory in form and substance to the Company, to the effect
that such accountants have performed certain specified
procedures, all of which have been agreed to by the Company, as
a result of which they have determined that the information
included in the Computational Materials, ABS Term Sheets or
Collateral Term Sheets (if any), provided by the Underwriters to
the Company for filing on Form 8-K pursuant to Section 5 and
subsection (i), is accurate except as to such matters that are
not deemed by the Company to be material. The foregoing letter
shall be obtained at the expense of the Company.
(i) In the event that an Underwriter must prepare corrected
Computational Materials, ABS Term Sheets or Collateral Term
Sheets pursuant to Section 5(d), the Company shall file any
corrected Computational Materials, ABS Term Sheets or Collateral
Term Sheets no later than two days following receipt thereof.
(j) The Company will file the Monthly Report on Form 8-K for a
period of twelve months following the applicable Closing Time.
Section 4. Conditions of Underwriters' Obligations. The obligations
of the Underwriters to purchase Securities pursuant to any Terms Agreement are
subject to the accuracy of the representations and warranties on the part of
the Company herein contained, to the accuracy of the statements of the
Company's officers made pursuant hereto, to the performance by the Company of
all of its obligations hereunder and to the following further conditions:
(a) At the applicable Closing Time (i) no stop order suspending
the effectiveness of the Registration Statement shall have been
issued or proceedings therefor initiated or threatened by the
Commission, (ii) the Securities shall have received the rating
or ratings specified in the Terms Agreement, and (iii) there
shall not have come to your attention any facts that would cause
you to believe that the Prospectus, together with the applicable
Prospectus Supplement at the time it was required to be
delivered to a purchaser of the Securities, contained an untrue
statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in light of
the circumstances existing at such time, not misleading.
(b) At the applicable Closing Time you shall have received:
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(1) The favorable opinion, dated as of the applicable Closing Time,
of _____________, counsel for the Company in form and substance satisfactory to
such of you as may be named in the applicable Terms Agreement, to the effect
that:
(i) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the
State of Delaware.
(ii) The execution and delivery by the Company of this
Agreement, the applicable Terms Agreement, the Trust Agreement, the
Loan Sale Agreement and the Transfer Agreement and the signing of the
Registration Statement by the Company are within the corporate power
of the Company and have been duly authorized by all necessary
corporate action on the part of the Company.
(iii) This Agreement and the Terms Agreement have been duly
authorized, executed and delivered by the Company, and each is a
valid and binding obligation of the Company enforceable against the
Company in accordance with its terms.
(iv) The Trust Agreement, the Loan Sale Agreement and the
Transfer Agreement and the Registration Statement have been duly
authorized, executed and delivered by the Company, and each is a
valid and binding obligation of the Company enforceable against the
Company in accordance with its terms.
(v) None of the transfer of the Student Loans to the Trust,
the issue and sale of the Securities, the consummation of the
transactions contemplated hereby or the fulfillment of the terms
hereof will, to the best of such counsel's knowledge, conflict with
or constitute a breach of, or default under, any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which
the Company is a party or by which it may be bound or to which the
property or assets of the Company are subject (which contracts,
indentures, mortgages, loan agreements, notes, leases and other such
instruments have been identified by the Company to such counsel), nor
will such action result in any violation of the provisions of the
certificate of incorporation or by laws of the Company or, to the
best of such counsel's knowledge, any order or regulation known to us
to be applicable to the Company of any state or federal court,
regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over the Company.
(vi) The Notes have been duly authorized and, when executed
and authenticated as specified in the Indenture and delivered and
paid for pursuant to this Agreement and the applicable Terms
Agreement, will be duly issued , valid and binding obligations of the
Trust and will be entitled to the benefits of the Indenture.
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(vii) The Certificates have been duly authorized and, when
executed and authenticated as specified in the Trust Agreement and
delivered and paid for pursuant to this Agreement and the applicable
Terms Agreement, will be duly issued and entitled to the benefits of
the Trust Agreement.
(viii) To the best of such counsel's knowledge, no filing
or registration with or notice to or consent, approval, authorization
or order of any [Massachusetts] or federal court or governmental
authority or agency is required to be obtained by the Company for the
consummation by the Company of the transactions contemplated by the
Trust Agreement, the Loan Sale Agreement and the Transfer Agreement.
(ix) The Registration Statement is effective under the 1933
Act, and, to the best of such counsel's knowledge and information, no
stop order suspending the effectiveness of the Registration Statement
has been issued under the 1933 Act or proceedings therefor initiated
or threatened by the Commission.
(x) The Registration Statement, as amended or supplemented,
and the Prospectus, as amended or supplemented, at the time they
became effective did not, and as of the Closing Time will not contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading.
(xi) The Trust Agreement and the Transfer Agreement are not
required to be qualified under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"). (xii) The Indenture has been
duly qualified under the Trust Indenture Act.
(xii) The Indenture has been duly qualified under the
Trust Indenture Act.
(xiii) The conditions to the use by the Company of a
registration statement on Form S-3 under the 1933 Act, as set forth
in the General Instructions to Form S 3, have been satisfied with
respect to the Registration Statement and the Prospectus. To the best
of such counsel's knowledge, there are no contracts or documents of
the Company which are required to be filed as exhibits to the
Registration Statement pursuant to the 1933 Act or the Regulations
thereunder which have not been so filed or incorporated by reference.
(xiv) Each of the Seller and the Trust created by the Trust
Agreement is not, and will not as a result of the offer and sale of
the Securities as contemplated in the Prospectus and in this
Agreement become, an "investment company" as such term is defined in
the 1940 Act.
(xv) The statements in the Prospectus under the captions
"Description of the Notes" and "Description of the Certificates" and
in the
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Prospectus Supplement under the captions "Description of the Notes",
"Description of the Certificates" and "Description of the Transfer
and Servicing Agreements", insofar as such statements purport to
summarize certain terms of the Securities, the Indenture, the Trust
Agreement, the Loan Sale Agreement and the Transfer Agreement,
constitute a fair and accurate summary of such documents.
(xvi) The Registration Statement and the Prospectus (other
than the financial statements and other financial, statistical and
numerical information included therein, as to which no opinion need
be rendered) as of their respective effective or issue dates,
complied as to form in all material respects with the requirements of
the 1933 Act and the Regulations thereunder.
(xvii) The execution, delivery and performance by the
Company of the Trust Agreement, the Loan Sale Agreement and the
Transfer Agreement do not require the consent or approval of, the
giving of notice to, the registration with, or the taking of any
other action in respect of any federal, state or other governmental
agency or authority which has not previously been effected.
(xviii) To such counsel's knowledge, there are no pending
or overtly threatened lawsuits or claims against the Company or
relating to the transactions contemplated by the Underwriting
Agreement, the Terms Agreement, the Trust Agreement, the Loan Sale
Agreement and the Transfer Agreement which, if adversely determined,
would have a material adverse effect on the transactions contemplated
by the Underwriting Agreement, the Terms Agreement, the Trust
Agreement, the Loan Sale Agreement and the Transfer Agreement.
(xix) Each Class ____ Note is an "Eligible Security" within
the meaning of Rule 2a-7(a)(9) promulgated under the 1940 Act.
Such counsel shall deliver to you such additional opinions addressing
the transfer by the Company to the Trust of its right, title and interest in
and to the Student Loans and other property included in the Trust on the
Closing Time as may be required by each Rating Agency rating the Securities.
Such counsel shall state that they have participated in the
conferences with officers and other representatives of the Company, your
counsel, representatives of the independent accountants for the Company and you
at which the contents of the Registration Statement and the Prospectus were
discussed and, although such counsel are not passing upon and do not assume
responsibility for, the factual accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus (except as
stated in paragraph (xvi) above) and have made no independent check or
verification thereof for the purpose of rendering this opinion, on the basis of
the foregoing (relying as to materiality to a large extent upon the
certificates of officers and other representatives of the Company), nothing has
come to their attention that leads such counsel to believe that the
Registration Statement, when it became effective, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
that the Registration Statement and
12
the Prospectus on the date of the Terms Agreement contained, and the Prospectus
on the date hereof contains, any untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that such counsel need express no view with respect to the
financial statements, schedules and other financial, statistical and numerical
data included in or incorporated by reference into the Registration Statement
or the Prospectus.
(2) The favorable opinion, dated as of the applicable Closing Time,
of counsel to the Seller, as seller of the Student Loans, in form and substance
satisfactory to you and your counsel, to the effect that:
(i) The Seller has been duly organized and is validly
existing as a corporation in good standing under the laws of the
State of Delaware.
(ii) The Seller is qualified to do business, and is in good
standing, as a foreign corporation in each U.S. jurisdiction in which
the character of the business owned or leased by it makes such
qualification necessary, except where the failure to be so qualified
would not have a material adverse effect on the financial condition
of the Seller.
(iii) The execution and delivery by the Seller of the Loan
Sale Agreement are within the corporate power of the Seller and have
been duly authorized by all necessary corporate action on the part of
the Seller.
(iv) The Loan Sale Agreement has been duly authorized,
executed and delivered by the Seller, and is a valid and binding
obligation of the Seller enforceable against the Seller in accordance
with its terms.
(v) None of the transfer of the Student Loans to the
Company, the issue and sale of the Securities, the consummation of
the transactions contemplated hereby or the fulfillment of the terms
hereof will, to the best of such counsel's knowledge, conflict with
or constitute a breach of, or default under, any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which
the Seller is a party or by which it may be bound or to which the
property or assets of the Seller are subject (which contracts,
indentures, mortgages, loan agreements, notes, leases and other such
instruments have been identified by the Seller to such counsel), nor
will such action result in any violation of the provisions of the
certificate of incorporation or by laws of the Seller or, to the best
of such counsel's knowledge, any order or regulation known to us to
be applicable to the Seller of any state or federal court, regulatory
body, administrative agency, governmental body or arbitrator having
jurisdiction over the Seller.
(vi) To the best of such counsel's knowledge, no filing or
registration with or notice to or consent, approval, authorization or
order of any [Massachusetts] or federal court or governmental
authority or agency is required
13
to be obtained by the Seller for the consummation by the Seller of
the transactions contemplated by the Loan Sale Agreement.
(vii) The execution, delivery and performance by the Seller
of the Loan Sale Agreement do not require the consent or approval of,
the giving of notice to, the registration with, or the taking of any
other action in respect of any federal, state or other governmental
agency or authority which has not previously been effected.
(viii) To such counsel's knowledge, there are no pending or
overtly threatened lawsuits or claims against the Seller or relating
to the transactions contemplated by the Loan Sale Agreement which, if
adversely determined, would have a material adverse effect on the
transactions contemplated by the Loan Sale Agreement.
(3) The favorable opinion of counsel to the Indenture Trustee, dated
as of the applicable Closing Time, addressed to you and in form and scope
satisfactory to your counsel, to the effect that:
(i) The Indenture Trustee is a national banking association
duly organized and validly existing under the laws of the United
States.
(ii) The Indenture 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 Transfer Agreement, the Servicing Agreement and the
Administration Agreement.
(iii) The execution and delivery of the Indenture, the
Transfer Agreement and the Administration Agreement and the
acceptance of the Servicing Agreement and the performance by the
Indenture Trustee of its obligations under the Indenture, the
Transfer Agreement, the Servicing Agreement and the Administration
Agreement have been duly authorized by all necessary corporate action
of the Indenture Trustee and each has been duly executed and
delivered by the Indenture Trustee.
(iv) The Indenture, the Transfer Agreement, the Servicing
Agreement and the Administration Agreement constitute valid and
binding obligations of the Indenture Trustee enforceable against the
Indenture Trustee in accordance with their terms.
(v) The execution and delivery by the Indenture Trustee of
the Indenture, the Transfer Agreement and the Administration
Agreement and the acceptance of the Servicing Agreement do not
require any consent, approval or authorization of, or any
registration or filing with, any New York or United States federal
governmental authority, other than the qualification of the Indenture
Trustee under the Trust Indenture Act.
14
(vi) Each of the Notes has been duly authenticated by the
Indenture Trustee.
(vii) Neither the consummation by the Indenture Trustee of
the transactions contemplated in the Transfer Agreement, the
Servicing Agreement, the Indenture or the Administration Agreement
nor the fulfillment of the terms thereof by the Indenture Trustee
will conflict with, result in a breach or violation of, or constitute
a default under any law or the charter, bylaws or other
organizational documents of the Indenture Trustee or the terms of any
indenture or other agreement or instrument known to such counsel to
which the Indenture 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 Indenture Trustee or any of its subsidiaries of any
court, regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over the Indenture Trustee or any of
its subsidiaries.
(viii) To the knowledge of such counsel there is no action,
suit or proceeding pending or threatened against the Indenture
Trustee (as trustee under the Indenture or in its individual
capacity) before or by any governmental authority that, if adversely
decided, would materially and adversely affect the ability of the
Indenture Trustee to carry out the transactions contemplated in the
Indenture, the Transfer Agreement, the Servicing Agreement or the
Administration Agreement.
(ix) The execution, delivery and performance by the
Indenture Trustee of the Transfer Agreement, the Servicing Agreement,
the Indenture and the Administration Agreement will not subject any
of the property or assets of the Trust or any portion thereof to any
lien created by or arising under the Indenture Trustee that is
unrelated to the transactions contemplated in such Agreements.
(x) The Indenture Trustee is an "eligible lender" as such
term is defined in Section 435(d) of the Higher Education Act for
purposes of holding legal title to the Financed Student Loans.
(4) The favorable opinion of counsel to the Owner Trustee, dated as
of the applicable Closing Time addressed to you and in form and scope
satisfactory to your counsel, to the effect that:
(i) The Trust has been duly formed and is validly existing
as a business trust under the Delaware Business Trust Act, 12 Del. C.
ss. 3801 et seq. (the "Business Trust Statute").
(ii) The Owner Trustee is a banking or trust corporation
duly incorporated and validly existing under the laws of the State of
Delaware.
(iii) The Owner Trustee has the full corporate trust power
and authority to enter into and perform its obligations under the
Trust Agreement and,
15
on behalf of the Trust, under the Indenture, the Transfer Agreement,
the Servicing Agreement and the Administration Agreement.
(iv) The execution and delivery of the Trust Agreement and,
on behalf of the Trust, of the Indenture, the Transfer Agreement, the
Servicing Agreement, the Administration Agreement, the Certificates
and the Notes and the performance by the Owner Trustee of its
obligations under the Trust Agreement, the Indenture, the Transfer
Agreement, the Servicing Agreement and the Administration Agreement
have been duly authorized by all necessary action of the Owner
Trustee and each has been duly executed and delivered by the Owner
Trustee.
(v) The Trust Agreement constitutes valid and binding
obligations of the Owner Trustee enforceable against the Owner
Trustee in accordance with its terms.
(vi) The execution and delivery by the Owner Trustee of the
Trust Agreement and, on behalf of the Trust, of the Indenture, the
Transfer Agreement, the Servicing Agreement and the Administration
Agreement do not require any consent, approval or authorization of,
or any registration or filing with, any Delaware or United States
federal governmental authority, having trust power over the Owner
Trustee, other than those consents, approvals or authorizations as
have been obtained and the filing of the Certificate of Trust with
the Secretary of State of the State of Delaware.
(vii) The Owner Trustee has duly executed and delivered the
Trust Agreement and the Certificates, the Notes, the Indenture, the
Transfer Agreement, the Servicing Agreement and the Administration
Agreement have been duly executed and delivered by the Trust. The
Certificates have been duly authenticated by the Trust.
(viii) Neither the consummation by the Owner Trustee of the
transactions contemplated in the Transfer Agreement, the Servicing
Agreement, the Indenture, the Trust Agreement or the Administration
Agreement nor the fulfillment of the terms thereof by the Owner
Trustee will conflict with, result in a breach or violation of, or
constitute a default under any law or the charter, bylaws or other
organizational documents of the Owner Trustee or the terms of any
indenture or other agreement or instrument known to such counsel to
which the Owner 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 Owner Trustee or any of its subsidiaries of any
court, regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over the Owner Trustee or any of its
subsidiaries.
(ix) To the knowledge of such counsel there is no action,
suit or proceeding pending or threatened against the Owner Trustee
(as owner trustee
16
under the Trust Agreement or in its individual capacity) before or by
any governmental authority that, if adversely decided, would
materially adversely affect the ability of the Owner Trustee to
perform its obligations thereunder.
(x) The execution, delivery and performance by the Owner
Trustee (as trustee under the Trust Agreement or in its individual
capacity, as the case may be) of the Transfer Agreement, the
Servicing Agreement, the Indenture, the Trust Agreement or the
Administration Agreement will not subject any of the property or
assets of the Trust or any portion thereof to any lien created by or
arising under the Owner Trustee that is unrelated to the transactions
contemplated in such agreements.
(5) To the favorable opinion of counsel to the Seller, dated as of
the applicable Closing Time, addressed to you and in form and scope
satisfactory to your counsel to the effect that the Seller has effectively
conveyed to the Company all of its right, title and interest in and to such
Student Loans as of the applicable Closing Time, and upon the occurrence of any
proceedings with respect to the Seller under the federal or state bankruptcy,
insolvency or similar law, or the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Seller or of any substantial part of its property or
the making by the Seller of an assignment for the benefit of creditors, such
Student Loans would not be deemed to be part of the assets of the Seller
pursuant to the principles of substantive consolidation or otherwise.
(6) The favorable opinion of counsel to the Company regarding the
perfected transfer of the Student Loans to the Trust and the grant of a first
perfected security interest in the Student Loans to the Indenture trustee
pursuant to the Indenture.
(7) The favorable opinion or opinions, dated as of the applicable
Closing Time, of counsel for the Underwriters with respect to the issue and
sale of the Securities, the Registration Statement, this Agreement, the
Prospectus, the applicable Prospectus Supplement and other related matters as
the Underwriters may require.
(8) The opinion, dated as of the applicable Closing Time, of
____________, tax counsel to the Company, in form and substance satisfactory to
you and your counsel to the effect that:
(i) The statements in the Prospectus under the headings
["Summary of Terms Tax Considerations" and " ERISA Considerations",
and "Certain Legal Aspects of the Student Loans", "Certain Federal
Income Tax Consequences", "Certain State Tax Consequences" and "ERISA
Considerations"], and the statements in the Prospectus Supplement
under the headings ["Summary Tax Considerations" and " ERISA
Considerations", and "Certain Federal Income Tax and State Tax
Consequences", and "ERISA Considerations"], to the extent that they
constitute matters of law or legal conclusions with respect
17
thereto, have been reviewed by such counsel and are correct in all
material respects.
(ii) The Notes will be treated as debt for federal income
tax purposes and the Trust will not be classified as an association
which is taxable as a corporation.
(9) The favorable opinion of counsel to the Servicer, dated the
Closing Time, satisfactory in form and substance to you and your counsel, to
the effect that:
(i) The Servicer has been duly organized and is validly
existing as a Delaware corporation in good standing under the laws
thereof with full power and authority (corporate and other) to own
its properties and conduct its business as currently conducted by it,
and to enter into and perform its obligations under the Servicing
Agreement, and had at all relevant times, and now has, the power,
authority and legal right to service the Financed Student Loans
consistent with all applicable conditions, restrictions and
limitations of the federal Higher Education Act of 1965, as amended
(the "Higher Education Act").
(ii) The Servicing Agreement has been duly authorized,
executed and delivered by the Servicer and is the legal, valid and
binding obligation of the Servicer in accordance with its terms.
(iii) None of the execution and delivery by the Servicer of
the Servicing Agreement, the consummation by the Servicer of the
transactions contemplated therein, or the fulfillment of the terms
thereof by the Servicer will conflict with, result in a breach or
violation of, or constitute a default under any law or the charter,
bylaws or other organizational documents of the Servicer or of the
terms of any indenture or other agreement or instrument to which the
Servicer is a party or by which the Servicer is bound, or result in a
violation of or contravene the terms of any statute, order or
regulation applicable to the Servicer of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
the Servicer.
(iv) To the knowledge of such counsel 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 the Servicer before or by any governmental
authority that might materially and adversely affect the performance
by the Servicer of its obligations under, or the validity or
enforceability of, the Servicing Agreement.
(v) Nothing has come to such counsel's attention that would
lead such counsel to believe that the representations and warranties
of the Servicer contained in the Servicing Agreement are other than
as stated therein.
18
(10) The favorable opinion of counsel to the Eligible Lender Trustee,
dated the Closing Time and satisfactory in form and substance to you and your
counsel, to the effect that:
(i) The Eligible Lender Trustee is a national banking
association duly organized and validly existing under the laws of the
United States.
(ii) The Eligible Lender Trustee is an "eligible lender" as
such term is defined in Section 435(d) of the Higher Education Act
for purposes of holding legal title to the Financed Student Loans.
(c) At the applicable Closing Time, you shall have received a
certificate of the President or a Vice President of the Company,
dated as of such Closing Time, to the effect that the representations
and warranties of the Company contained in Section 1 hereof are true
and correct with the same force and effect as though such Closing
Time were a Representation Date.
(d) You shall have received from a firm of independent certified
public accountants acceptable to you, a letter, dated as of the date
of the applicable Terms Agreement, or as soon thereafter as is
practicable, and as of the applicable Closing Time, delivered at such
times, in the form heretofore agreed to.
(e) At the applicable Closing Time you shall have received, addressed
to you, any additional opinions delivered by counsel pursuant to the
request of the Rating Agency or Rating Agencies rating the
Securities.
(f) At the applicable Closing Time, counsel for the Underwriters
shall have been furnished with such documents and opinions as they
reasonably may require for the purpose of enabling them to pass upon
the issuance and sale of the Securities as herein contemplated and
related proceedings or in order to evidence the accuracy and
completeness of any of the representations and warranties, or the
fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company in connection with the issuance and
sale of the Securities as herein contemplated shall be satisfactory
in form and substance to you and counsel for the Underwriters.
(g) At the applicable Closing Time, each of the representations and
warranties of the Company set forth in the Trust Agreement, Loan Sale
Agreement and the Transfer Agreement and of the Seller in the Loan
Sale Agreement will be true and correct.
(h) As of the applicable Closing Time, each Guarantee Agreement will
have been duly and validly authorized, executed and delivered by, and
will constitute a legal, valid and binding obligation of, the related
Guarantor, enforceable in accordance with its terms.
19
(i) As of the applicable Closing Time, each of the Trust Agreement,
Loan Sale Agreement and the Transfer Agreement will have been duly
authorized, executed and delivered by, and will constitute a legal,
valid and binding obligation of, the Company, enforceable against the
Company in accordance with its terms.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, the applicable Terms Agreement
may be terminated by you by notice to the Company at any time at or prior to
the applicable Closing Time, and such termination shall be without liability of
any party to any other party except as provided in Section 7 hereof.
Section 5. Investor Information. Each Underwriter may prepare or
provide to prospective investors certain Computational Materials, ABS Term
Sheets or Collateral Term Sheets in connection with its offering of the
Securities, subject to the following conditions:
(a) Such Underwriter shall comply with the requirements of the
No-Action Letter of May 20, 1994 issued by the Commission to ▇▇▇▇▇▇,
Peabody Acceptance Corporation I, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & Co. Incorporated
and ▇▇▇▇▇▇ 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
(collectively, the "▇▇▇▇▇▇/PSA Letter"), and the requirements of the
No-Action Letter of February 17, 1995 issued by the Commission to the
Public Securities Association (the "PSA Letter" and, together with
the ▇▇▇▇▇▇/PSA Letter, the "No-Action Letters").
(b) For purposes hereof, "Computational Materials" shall have the
meaning given such term in the No-Action Letters, but shall include
only those Computational Materials that have been prepared or
delivered to prospective investors by an Underwriter. For purposes
hereof, "ABS Term Sheets" and "Collateral Term Sheets" shall have the
meanings given such terms in the PSA Letter but shall include only
those ABS Term Sheets or Collateral Term Sheets that have been
prepared or delivered to prospective investors by an Underwriter.
(c) Each Underwriter shall provide to the Company any Computational
Materials, ABS Term Sheets or Collateral Term Sheets which are
provided to investors no later than the date preceding the date such
Computational Materials, ABS Term Sheets or Collateral Term Sheets
are required to be filed pursuant to the applicable No-Action
Letters. Each Underwriter may provide copies of the foregoing in a
consolidated or aggregated form including all information required to
be filed.
(d) In the event that the Company or any Underwriter discovers an
error in the Computational Materials, ABS Term Sheets or Collateral
Term Sheets, the Underwriter that prepared such material shall
prepare corrected Computational Materials, ABS Term Sheets or
Collateral Term Sheets and deliver it to the Company for filing
pursuant to Section 3(i) hereof.
20
Section 6. Payment of Expenses. The Company and [ ] jointly and
severally agree to pay all expenses incident to the performance of its
obligations under this Agreement, including without limitation those related to
(i) the filing of the Registration Statement and all amendments thereto, (ii)
the printing and delivery to the Underwriters, in such quantities as you may
reasonably request, of copies of this Agreement, each Terms Agreement, any
agreements among Underwriters and selling agreements and the Underwriters'
questionnaires and powers of attorney, (iii) the preparation, issuance and
delivery of the Securities to the Underwriters, (iv) the fees and disbursements
of the Company's counsel and accountants, (v) the qualification of the
Securities under securities and Blue Sky laws and the determination of the
eligibility of the Securities for investment in accordance with the provisions
of Section 3(f) hereof, including filing fees, and the fees and disbursements
of counsel for the Underwriters in connection therewith and in connection with
the preparation of any Blue Sky Survey and Legal Investment Survey, (vi) the
printing and delivery to the Underwriters, in such quantities as you may
reasonably request, hereinafter stated, of copies of the Registration Statement
and Prospectus and all amendments and supplements thereto, and of any Blue Sky
Survey and Legal Investment Survey, (vii) the printing and delivery to the
Underwriters, in such quantities as you may reasonably request, of copies of
the Indenture, Trust Agreement, the Loan Sale Agreement and the Transfer
Agreement, (viii) the fees charged by investment rating agencies for rating the
Securities, (ix) the fees and expenses incurred in connection with the listing
of the Securities on any national securities exchange, (x) the fees and
expenses incurred with respect to the National Association of Securities
Dealers, Inc., including the fees and disbursements of counsel for the
Underwriters in connection therewith, (xi) the fees and expenses of the
Indenture Trustee, the Owner Trustee, the Interim Trustee and the Eligible
Lender Trustee, and their respective counsel, (xii) fees of counsel to the
Underwriters and (xiii) any fees of The Depository Trust Company.
If a Terms Agreement is terminated by you in accordance with the
provisions of Section 4 or Section 10(i) hereof, the Company and [ ] jointly
and severally agree to reimburse you for all reasonable out pocket expenses,
including the reasonable fees and disbursements of counsel for the
Underwriters.
Section 7. Indemnification. (a) The Company and [ ] jointly and
severally agree to indemnify and hold harmless the Underwriters and each
person, if any, who controls the Underwriters within the meaning of Section 15
of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus (or any amendment or
supplement thereto) or the omission or alleged omission therefrom of
a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not
misleading;
21
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, (A) if such settlement is effected with the
written consent of the Company or (B) if such settlement is effected
without the written consent of the Company more than 30 days after
receipt by the Company of a notice from the Underwriters,
substantially reflecting the proposed terms of such settlement, to
which the Company has not responded prior to the date such settlement
is effected;
(iii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in
the Computational Materials, ABS Term Sheets or Collateral Term
Sheets distributed by any Underwriter; unless such untrue statement
or alleged untrue statement of a material fact was made in reliance
upon and in conformity with Derived Information (defined below)
provided by the Underwriters expressly for use in the Computational
Materials, the ABS Term Sheets or the Collateral Term Sheets and the
untrue statement or alleged untrue statement did not derive from an
inaccuracy in the Seller-Provided Information (defined below) used in
the preparation of such Computational Materials, ABS Term Sheets or
Collateral Term Sheets;
(iv) against any and all expense whatsoever (including the
fees and disbursements of counsel chosen by you), reasonably incurred
in investigating, preparing to defend or defending against any
litigation, or investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon
any such untrue statement or omission, to the extent that any such
expense is not paid under (i), (ii) or (iii) above, which expenses
shall be reimbursed as they are incurred; and
(v) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any action brought by
a third party against the Company and the Underwriters jointly in the
event that the Company enters into a settlement agreement with
respect to such action without the written consent of the
Underwriters.
This indemnity agreement will be in addition to any liability which
the Company and [ ] may otherwise have. Insofar as this indemnity may permit
indemnification for liabilities under the 1933 Act of any person who is a
partner of the Underwriters entitled to indemnity hereby or who controls the
Underwriters within the meaning of Section 15 of the 1933 Act and who, at the
date of this Agreement, is a director, officer or controlling person of the
Company, such indemnity agreement is subject to the undertaking of the Company
in the Registration Statement.
(b) Each Underwriter severally agrees to indemnify severally and hold
harmless the Company, each of the Company's directors, each of the
Company's officers
22
who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
as follows:
(i) against any and all loss, liability, claim, damage and
expense described in the indemnity contained in subsection (a) of
this Section, as incurred, but only with respect to untrue statements
or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto) or the Prospectus
(or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by the
Underwriters expressly for use in the Registration Statement (or any
amendment thereto) or the Prospectus (or any amendment or supplement
thereto); and
(ii) against any and all loss, liability, claim, damage and
expense described in the indemnity contained in subsection (a) of
this Section, as incurred, but only with respect to untrue statements
or alleged untrue statements made in the Computational Materials,
Collateral Term Sheets or ABS Term Sheets prepared or provided by
such Underwriter to the extent that such untrue statement or alleged
untrue statement of a material fact was made in reliance upon and in
conformity with Derived Information provided expressly for use in the
Computational Materials, the ABS Term Sheets or the Collateral Term
Sheets and the untrue statements or alleged untrue statements did not
derive from an inaccuracy in the Seller-Provided Information used in
the preparation of such Computational Materials, ABS Term Sheets or
Collateral Term Sheets.
This indemnity agreement will be in addition to any liability which
such Underwriter may otherwise have.
For purposes of this Agreement, as to each Underwriter, "Derived
Information" means such portion, if any, of the information delivered to the
Company by such Underwriter pursuant to Section 5 for filing with the
Commission on Form 8-K and:
(i) is not contained in the Prospectus without taking into
account information incorporated therein by reference; and
(ii) does not constitute Seller-Provided Information.
"Seller-Provided Information" means any computer tape (or other
information) furnished to any Underwriter by or on behalf of the Company
concerning the assets of the Trust.
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it with respect to
which indemnity may be sought hereunder but failure to so notify an
indemnifying party shall not relieve it from any liability which it
may have on account of this indemnity agreement to the extent such
indemnifying party was not materially prejudiced by such failure or
which it may have otherwise than on account of this indemnity
agreement. An
23
indemnifying party may participate at its own expense in the defense
of such action; provided, however, that counsel to the indemnifying
party shall not (except with the consent of the indemnified party)
also be counsel to the indemnified party. In no event shall the
indemnifying parties be liable for the fees and expenses of more than
one counsel (in addition to local counsel) for all indemnified
parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same
general allegations or circumstances.
Section 8. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 7 hereof is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Company and [ ]
jointly and severally on the one hand, and the Underwriters, on the other,
shall contribute to the aggregate losses, liabilities, claims, damages and
expenses of the nature contemplated by said indemnity agreement incurred by the
Company and one or more of the Underwriters (i) in such proportion as shall be
appropriate to reflect the relative benefit received by the Underwriters, as
represented by the percentage that the Underwriting discount or discounts on
the cover of such Prospectus Supplement bears to the initial public offering
price or prices as set forth thereon, and the Company shall be responsible for
the balance; 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 benefit referred to in clause (i) above but also the relative
fault of the Company on the one hand and the Underwriters on the other with
respect to statements or omissions which resulted in such loss, claim, damage
or liability, or action in respect thereof, as well as any other relevant
equitable considerations; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the ▇▇▇▇
▇▇▇) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation and, provided further, you shall not be
required to contribute any amount in excess of the amount by which the total
price of the Securities purchased by you pursuant to the Terms Agreement
exceeds the amount of any damages which you have otherwise paid or become
liable to pay by reason of any untrue or alleged untrue statement or omission
or alleged omission. For purposes of this Section, each person, if any, who
controls the Underwriters within the meaning of Section 15 of the 1933 Act
shall have the same rights to contribution as the Underwriters and each
director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as the Company.
Section 9. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement, or contained in certificates of officers of the Company submitted
pursuant hereto, shall remain operative and in full force and effect,
regardless of any termination of this Agreement, or any investigation made by
or on behalf of the Underwriters or controlling person thereof, or by or on
behalf of the Company and shall survive delivery of any Securities to the
Underwriters.
Section 10. Termination of Agreement. This Agreement may be
terminated for any reason at any time by either the Company or you upon the
giving of 30 days' written notice of such termination to the other party
hereto. You may also terminate such Terms Agreement, immediately upon notice to
the Company, at any time at or prior to the applicable Closing Time
24
(i) if there has been, since the date of such Terms Agreement or since the
respective dates as of which information is given in the Registration Statement
or Prospectus any change, or any development involving a prospective change in,
or affecting, the condition, financial or otherwise, earnings, affairs or
business of the Company whether or not arising in the ordinary course of
business, which in your judgment would materially impair the market for, or the
investment quality of, the Securities, or (ii) if there has occurred any
material adverse change in the financial markets in the United States, or if
there has occurred any outbreak or escalation of hostilities or other calamity
or crisis the effect of which on the financial markets of the United States is
such as to make it, in your judgment, impracticable to proceed with the
offering or delivery of the Securities or enforce contracts for the sale of the
Securities, or (iii) if trading generally on either the New York Stock Exchange
or the American Stock Exchange has been suspended, or minimum or maximum prices
for securities have been required, by either of said exchanges or by order of
the Commission or any other governmental authority, or if a banking moratorium
has been declared by either federal, Minnesota or New York authorities. In the
event of any such termination, (A) the covenants set forth in Section 3 hereof
with respect to any offering of Securities shall remain in effect so long as
the Underwriters own any such Securities purchased from the Company pursuant to
the applicable Terms Agreement and (B) the covenant set forth in Section 3(c),
the provisions of Section 6, the indemnity agreement set forth in Section 7,
and the contribution provisions set forth in Section 8, and the provisions of
Sections 9 and 14 shall remain in effect.
Section 11. Default by One or More Underwriter. No action taken
pursuant to this Section shall relieve any defaulting Underwriters from
liability with respect to any default of such Underwriters under this Agreement
and the applicable Terms Agreement.
In the event of a default by any Underwriter as set forth in this
Section, either you or the Company shall have the right to postpone the
applicable Closing Time for a period of time not exceeding seven days in order
that any required changes in the Registration Statement or Prospectus or in any
other documents or arrangements may be effected.
Section 12. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to you at the address set forth on the first
page hereof, attention of the Syndicate Registration Department, with a copy to
the General Counsel. Notices to the Company shall be directed to EFG Funding
Corporation, One Financial Place, Suite 2-2, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of ____________________________.
Section 13. Parties. This Agreement shall inure to the benefit of and
be binding upon you and the Company and any Terms Agreement shall inure to the
benefit of and be binding upon the Company and any Underwriter who becomes a
party to a Terms Agreement, and their respective successors. Nothing expressed
or mentioned in this Agreement or a Terms Agreement is intended or shall be
construed to give any person, firm or corporation, other than the parties
hereto or thereto and their respective successors and the controlling persons
and officers and directors referred to in Sections 7 and 8 and their heirs and
legal representatives any legal or equitable right, remedy or claim under or
with respect to this Agreement or a Terms Agreement or any provision
25
herein or therein contained. This Agreement and any Terms Agreement and all
conditions and provisions hereof or thereof are intended to be for the sole and
exclusive benefit of the parties and their respective successors and said
controlling persons and officers and directors and their heirs and legal
representatives (to the extent of their rights as specified herein and therein)
and for the benefit of no other person, firm or corporation. No purchaser of
Securities from any Underwriter shall be deemed to be a successor by reason
merely of such purchase.
Section 14. Governing Law and Time. This Agreement and each Terms
Agreement shall be governed by the laws of the State of New York. Specified
times of day refer to New York City time.
Section 15. Counterparts. This Agreement and any Terms Agreement may
be executed in counterparts, each of which shall constitute an original of any
party whose signature appears on it, and all of which shall together constitute
a single instrument.
26
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument along with all counterparts will become a binding agreement between
you and the Company in accordance with its terms.
Very truly yours,
EFG FUNDING CORPORATION
By______________________________
Name:
Title:
[-------------------------]
By______________________________
Name:
Title:
CONFIRMED AND ACCEPTED, as of
the date first above written:
▇▇▇▇▇▇ BROTHERS INC.
By______________________________
Name:
Title:
27
EXHIBIT A
EFG FUNDING CORPORATION
(Seller and Servicer)
EFG Student Loan Trust _____-___
[FORM OF TERMS AGREEMENT]
Dated: _____________
To: EFG Funding Corporation (the "Company")
Re: Underwriting Agreement dated _______, 1999
Series Designation: EFG Student Loan Trust _____-___
-------------------
Underwriters:
-------------
▇▇▇▇▇▇ Brothers Inc.
-------------------
Terms of the Notes:
Original
Principal
Class Amount* Interest Rate
-------------------------------------------------------------------------------
__
Class ___ $
Class ___ $
* Approximate. Subject to permitted variance of plus or minus 5%.
A-1
Terms of the Certificates:
Original
Principal
Class Amount* Pass-Through Rate
-------------------------------------------------------------------------------
__
Class ___ $
Class ___ $
* Approximate. Subject to permitted variance of plus or minus 5%.
Ratings of the Securities:
Class ___: "___" by ___ and "___" by ________.
Class ___: "___" by ___ and "___" by ________.
Class ___: "___" by ___ and "___" by ________.
Class ___: "___" by ___ and "___" by ________.
Seller:
EFG Funding Corporation
Servicer:
EFG Technologies, Inc.
Trust:
The Trust will include, among other things, a pool of student loans
(the "Initial Financed Student Loans") and certain monies due thereunder on and
after the applicable Cutoff Date. The Company will acquire the Initial Financed
Student Loans pursuant to a loan sale agreement (the "Loan Sale Agreement")
between EFG Financial Group, Inc. ("EFG"), as seller and the Company, as
purchaser. Such Initial Financed Student Loans will be sold to the Eligible
Lender Trustee (as defined below) on behalf of the Trust by the Seller (and,
with respect to legal title to the Financed Student Loans, by The First
National Bank of Chicago, as interim trustee for the Seller (the "Interim
Trustee")) pursuant to a transfer agreement (the "Transfer Agreement") among
the Trust, the Seller, the Interim Trustee and The First National Bank of
Chicago, as eligible lender trustee (the "Eligible Lender Trustee"). Under
certain circumstances after the Closing Time (as defined below), the Eligible
Lender Trustee, acting on behalf of the Trust, may acquire additional student
A-2
loans ("Additional Acquired Student Loans") or may originate certain student
loans (such originated Student Loans, together with the Initial Financed
Student Loans and the Additional Acquired Student Loans being referred to
herein, collectively, as the "Financed Student Loans"). The Financed Student
Loans are to be serviced by EFG Technologies, Inc., a Delaware corporation (the
"Servicer") pursuant to a servicing agreement (the "Servicing Agreement"),
among the Trust, the Servicer, the Seller and the Eligible Lender Trustee.
Credit Enhancement:
Distribution Dates:
Each January __, April __, July __ and October __ (or if any such day
is not a Business Day, the next succeeding Business Day).
Purchase Price:
Subject to the terms of the following paragraph, the purchase price
payable by the Underwriter for the Securities is as follows: _________% of the
principal amount of the Class __ Notes; __________% of the principal amount of
the Class ___ Notes; _________% of the principal amount of the Class ___
Certificates; and __________% of the principal amount of the Class ___
Certificates.
Payment of the purchase price shall be in immediately available
federal funds wired to such bank as may be designated by the Company.
Underwriting Commission:
Notwithstanding anything to the contrary in the Underwriting
Agreement, no additional underwriting commission shall be payable by the
Company to the Underwriter in connection with the purchase of the Securities.
Public Offering Price and/or method of determining price at which the
Underwriter will sell the Securities is as follows:
Class ___ Notes: _________%
Class ___ Notes: _________%
Class ___ Certificates: _________%
Class ___ Certificates: _________%
Closing Time and Location:
On or about ________________ at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇▇▇, New York, New York.
A-3
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument along with all counterparts will become a binding agreement between
you and the Company in accordance with its terms.
▇▇▇▇▇▇ BROTHERS INC.
By
------------------------------
Name:
Title:
--------------------------------
By
------------------------------
Name:
Title:
ACCEPTED:
EFG FUNDING CORPORATION
By
--------------------------------
Name:
Title:
A-4