EXHIBIT 1.1
EXECUTION COPY
EDUCATION FUNDING CAPITAL TRUST-II
$1,000,000,000 EDUCATION LOAN BACKED NOTES
SERIES A&B
UNDERWRITING AGREEMENT
Citigroup Global Markets Inc. April 11, 2003
as Representative of the Underwriters named herein
Ladies and Gentlemen:
Education Lending Services, Inc. ("ELS"), a Delaware corporation, as
administrator of the business activities of the Depositor (as defined below),
has caused the Depositor to form a statutory trust under the laws of the State
of Delaware known as Education Funding Capital Trust-II (the "Trust"), to which
the Depositor has and will transfer Student Loans, and ELS proposes to cause the
Trust to sell to Citigroup Global Markets Inc. (the "Representative") and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. (collectively with the Representative, the
"Underwriters", and each individually, an "Underwriter"), pursuant to the terms
of this Underwriting Agreement (this "Agreement"), Education Loan Backed Notes
in the following Series and initial principal amounts: $80,000,000 Education
Loan Backed Notes, Series 2003A-1 (the "Series A-1 Notes"), $144,000,000
Education Loan Backed Notes, Series 2003A-2 (the "Series A-2 Notes"),
$276,000,000 Education Loan Backed Notes, Series 2003A-3 (the "Series A-3
Notes"), $75,000,000 Education Loan Backed Notes, Series 2003A-4 (the "Series
A-4 Notes"), $75,000,000 Education Loan Backed Notes, Series 2003A-5 (the
"Series A-5 Notes"), $100,000,000 Education Loan Backed Notes, Series 2003A-6
(the "Series A-6 Notes"), $100,000,000 Education Loan Backed Notes, Series
2003A-7 (the "Series A-7 Notes"), and $100,000,000 Education Loan Backed Notes,
Series 2003A-8 (the "Series A-8 Notes" and together with the Series A-1 Notes,
the Series A-2 Notes, the Series A-3 Notes, the Series A-4 Notes, the Series A-5
Notes, the Series A-6 Notes, and the Series A-7 Notes, the "Series A Notes"),
and $50,000,000 Education Loan Backed Notes, Series 2003B-1 (the "Series B
Notes" and together with the Series A Notes, the "Notes").
Education Funding Capital I, LLC (the "Depositor"), a Delaware limited
liability company, will acquire a pool of Student Loans from Education Lending
Group, Inc. (the "Seller") pursuant to the Seller Transfer and Sale Agreement
dated as of April 1, 2003 (the "Seller Transfer and Sale Agreement") among the
Seller, the Depositor, Fifth Third Bank, as eligible lender trustee on behalf of
the Seller (the "Seller Eligible Lender Trustee"), and Fifth Third Bank, as
eligible lender trustee on behalf of the Depositor (the "Depositor Eligible
Lender Trustee"), which pool of Student Loans the Depositor will transfer to the
Trust pursuant to the Depositor Transfer and Sale Agreement dated as of April 1,
2003 (the "Depositor Transfer and
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Sale Agreement) among the Depositor, the Trust, the Depositor Eligible Lender
Trustee, and Fifth Third Bank, as eligible lender trustee on behalf of the Trust
(the "Trust Eligible Lender Trustee"; in its capacity as eligible lender trustee
on behalf of the Seller, the Depositor and the Trust, Fifth Third Bank is
referred to herein as the "Eligible Lender Trustee"). As of March 31, 2003, that
pool of Student Loans had an outstanding principal balance of $729,382,231.
The Trust was formed pursuant to a Trust Agreement dated as of February 6,
2003 (the "Original Trust Agreement") among the Depositor, Wilmington Trust
Company, a banking corporation formed under the laws of the State of Delaware,
as owner trustee of the Trust (the "Owner Trustee"), and Fifth Third Bank, as
co-owner trustee of the Trust (the "Co-Owner Trustee"). The Original Trust
Agreement was subsequently amended and restated by the Amended and Restated
Trust Agreement dated as of April 1, 2003 (the "Trust Agreement") among the
Depositor, the Owner Trustee, the Co-Owner Trustee, and the Trust Eligible
Lender Trustee.
ELS serves as administrator of the Depositor pursuant to the Administration
Agreement dated as of April 1, 2003 (the "Depositor Administration Agreement")
between ELS and the Depositor, and as administrator of the Trust pursuant to the
Administration Agreement dated as of April 1, 2003 (the "Trust Administration
Agreement"), between ELS and the Trust. Fifth Third Bank, a banking corporation
formed under the laws of the State of Ohio, acts as eligible lender trustee on
behalf of (i) the Seller pursuant to the Eligible Lender Trust Agreement dated
as of May 1, 2002 (as amended, the "Seller Eligible Lender Trust Agreement")
between Fifth Third Bank and the Seller, (ii) the Depositor pursuant to the
Eligible Lender Trust Agreement dated as of May 1, 2002 (the "Depositor Eligible
Lender Trust Agreement") between Fifth Third Bank and the Depositor, and (iii)
the Trust pursuant to the Eligible Lender Trust Agreement dated as of April 1,
2003 (the "Trust Eligible Lender Trust Agreement" and together with the Seller
Eligible Lender Trust Agreement and the Depositor Eligible Lender Trust
Agreement, the "Eligible Lender Trust Agreements") between Fifth Third Bank and
the Trust.
The Notes will be issued pursuant to an Indenture of Trust and a First
Supplemental Indenture of Trust, both dated as of April 1, 2003 (together, the
"Indenture"), among the Trust, Fifth Third Bank, as indenture trustee (the
"Indenture Trustee"), and the Trust Eligible Lender Trustee. Pursuant to the
Indenture, the Notes will be secured by, among other things, the Student Loans
to be acquired by the Trust.
As used in this Agreement, the term "Basic Documents" refers to the
following: (i) the Trust Agreement; (ii) the Indenture; (iii) the Eligible
Lender Trust Agreements, (iv) the Seller Transfer and Sale Agreement; (v) the
Depositor Transfer and Sale Agreement; (vi) the Master Servicing Agreement dated
as of April 1, 2003 among ELS, as master servicer (the "Master Servicer"), the
Trust, the Indenture Trustee and the Trust Eligible Lender Trustee; (vii) the
Student Loan Origination and Servicing Agreement dated as of April 16, 2003 (the
"Great Lakes Subservicing Agreement") among Great Lakes Educational Loan
Services, Inc. ("Great Lakes"), the Trust Eligible Lender Trustee and the Master
Servicer; (viii) the Federal FFEL Servicing Agreement dated as of October 1,
2002 among ACS Education Services, Inc. ("ACS" and, together with Great Lakes,
the "Subservicers"), the Trust Eligible Lender Trustee and the Master Servicer,
as supplemented by the Amended and Restated Affiliate Servicing Addendum dated
as
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of April 1, 2003 among ACS, the Trust, the Trust Eligible Lender Trustee and the
Master Servicer (collectively, the "ACS Subservicing Agreement" and, together
with the Great Lakes Subservicing Agreement, the "Subservicing Agreements") (ix)
the Bailment Notice and Acknowledgement dated April 16, 2003 among the Trust,
the Trust Eligible Lender Trustee, the Indenture Trustee and Great Lakes; (x)
the Bailment Notice and Acknowledgement dated April 16, 2003 among the Trust,
the Trust Eligible Lender Trustee, the Indenture Trustee and ACS; (xi) the
Depositor Administration Agreement; (xii) the Trust Administration Agreement;
(xiii) the Auction Agent Agreement dated as of April 1, 2003 (the "Auction Agent
Agreement") among the Trust, the Indenture Trustee and Deutsche Bank Trust
Company Americas, as auction agent (the "Auction Agent"); (xiv) the Market Agent
Agreement dated as of April 1, 2003 (the "Market Agent Agreement") among
Citigroup Global Markets Inc., as market agent, the Trust and the Indenture
Trustee; (xv) the Calculation Agent Agreement dated as of April 1, 2003 (the
"Calculation Agent Agreement") between Citigroup Global Markets Inc., the Trust
and the Indenture Trustee; (xvi) the Broker-Dealer Agreement dated as of April
1, 2003 between Citigroup Global Markets Inc. and the Auction Agent; (xvii) the
Broker-Dealer Agreement dated as of April 1, 2003 between ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co.
and the Auction Agent (together with the Broker-Dealer Agreement referred to in
(xvi) above, the "Broker-Dealer Agreements"); (xviii) this Agreement; and (xix)
the Notes. When used with reference to a Person, the term "its Basic Documents"
refers to the Basic Documents to which that Person is a party.
Capitalized terms used but not defined in this Agreement shall have the
meanings ascribed to such terms in the Indenture.
1. Purchase and Sale of Notes.
(a) Subject to the terms and conditions and upon the basis of the
representations, warranties and covenants hereinafter set forth, the
Underwriters hereby agree, jointly and severally, to purchase from the Trust,
and the Seller, the Depositor and ELS (the Seller, the Depositor and ELS are
hereinafter referred to collectively as the "Responsible Parties") hereby agree,
jointly and severally, to cause the Trust to sell to the Underwriters, all (but
not less than all) of the Notes, dated as of their date of issuance, in the
principal amount and at the aggregate purchase price set forth on Appendix A,
attached hereto.
(b) 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 Responsible Parties (which may be withheld
in the Responsible Parties' sole discretion), such registration, qualification
or filing has been completed. The Underwriters agree that all offers and sales
of the Notes will be made in accordance with applicable federal and state
securities laws and regulations.
2. Closing. No later than 12:00 noon, New York City time, on April 16,
2003, or at such other time or on such earlier or later date as shall have been
mutually agreed upon by ELS and the Representative, ELS shall deliver, or cause
to be delivered the Notes to the Indenture
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Trustee to be held in its custody pursuant to a FAST delivery arrangement with
and on behalf of The Depository Trust Company ("DTC"), which Notes shall be in
form satisfactory to the Representative and duly executed by the Co-Owner
Trustee on behalf of the Trust, and shall deliver a specimen copy of each
executed and authenticated Note to the Representative together with the other
documents hereinafter mentioned; and the Representative shall accept such
delivery for the respective accounts of the Underwriters and the Underwriters
shall pay the purchase price of the Notes as set forth in Appendix A by wire
transfer in clearinghouse funds to the Indenture Trustee. Such payment and
delivery is herein called the "Closing" and the date of the Closing is herein
called the "Closing Date". The Notes (one Note for each Series in the respective
principal amount thereof unless otherwise required by the rules and regulations
of DTC) shall be made available to the Representative for checking and delivery
to the Indenture Trustee not less than 24 hours prior to the Closing at a place
designated by the Representative. The Notes may be typewritten and shall be
registered in the name of Cede & Co. ELS and the Co-Owner Trustee on behalf of
the Trust will file with DTC a Letter of Representations, together with all
riders and/or supplements thereto required by DTC, to permit the Notes to be
held in the custody of the Indenture Trustee pursuant to a FAST delivery
arrangement.
3. Representations, Warranties and Covenants of the Responsible Parties.
Each of the Responsible Parties represents and warrants to and agrees with the
Underwriters that:
(a) Registration statement on Form S-3 (No. 333-103502), including a
prospectus and such amendments thereto as may have been required to the date
hereof, relating to the Notes and the offering thereof from time to time in
accordance with Rule 415 under the Securities Act of 1933, as amended (the
"Act"), has been filed with the Securities and Exchange Commission (the "SEC")
and such registration statement, as amended, has become effective; such
registration statement, as amended, and the prospectus relating to the sale of
the Notes offered thereby constituting a part thereof, as from time to time
amended or supplemented (including the base prospectus, any prospectus
supplement filed with the Commission pursuant to Rule 424(b) under the Act, the
information deemed to be a part thereof pursuant to Rule 430A(b) under the Act,
and the information incorporated by reference therein) are respectively referred
to herein as the "Registration Statement" and the "Prospectus", respectively;
and the conditions to the use of a registration statement on Form S-3 under the
Act, as set forth in the General Instructions to Form S-3, and the conditions of
Rule 415 under the Act, have been satisfied with respect to the Registration
Statement.
(b) On the effective date of the Registration Statement, the Registration
Statement and the Prospectus conformed in all respects to the requirements of
the Act, the rules and regulations of the SEC (the "Rules and Regulations") and
the Trust Indenture Act of 1939, as amended, and the rules and regulations
thereunder (the "Trust Indenture Act"), and, except with respect to information
omitted pursuant to Rule 430A of the Act, did not include any untrue statement
of a material fact or, in the case of the Registration Statement, omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading and, in the case of the Prospectus, omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, and on the date
of this Agreement and on the Closing Date, the Registration Statement and the
Prospectus will conform in all respects to the requirements of the Act, the
Rules and Regulations and the Trust Indenture Act, and neither of such documents
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included or will include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that the foregoing does
not apply to statements in or omissions from the Registration Statement or the
Prospectus based upon written information furnished to the Responsible Parties
by the Underwriter, specifically for use therein
(c) The SEC has not issued and, to the best knowledge of the Responsible
Parties, is not threatening to issue any order preventing or suspending the use
of the Registration Statement.
(d) The Trust is a duly organized and validly existing Delaware statutory
trust and had or has, at the respective dates of their execution, full legal
rights, power and authority (i) to enter into its Basic Documents, (ii) to
authorize the issuance of the Notes and to issue, sell and deliver the Notes to
the Underwriters pursuant to the Indenture as provided herein, and (iii) to
carry out, give effect to and consummate the transactions contemplated by its
Basic Documents and the Prospectus.
(e) When delivered to and paid for by the Underwriters on the Closing Date
as provided herein, the Notes will be validly issued and outstanding limited
obligations of the Trust entitled to the benefits of the Indenture.
(f) All approvals, consents, authorizations, permits, elections and orders
of or filings or registrations with any governmental authority, board, agency or
commission having jurisdiction, including but not limited to, the United States
Department of Education under the Higher Education Act, that would constitute a
condition precedent to the performance by each of the Responsible Parties and
the Trust of their respective obligations under the Basic Documents have been
obtained 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.
(g) The Basic Documents to be executed by the Trust in connection with the
issuance and sale of the Notes (when executed and delivered by the respective
parties thereto) will constitute, legal, valid and binding obligations of the
Trust enforceable in accordance with their respective terms except as limited by
bankruptcy, reorganization, insolvency and other similar laws affecting
enforceability of creditors' rights generally and provided that the availability
of equitable remedies is subject to the application of equitable principles. The
Indenture has been duly qualified under the Trust Indenture Act with respect to
the Notes.
(h) To the knowledge of the Responsible Parties, no action, suit,
proceeding, inquiry or investigation, at law or in equity, before or by any
court, regulatory agency, public board or body, is pending or threatened in any
way affecting the existence of the Trust or seeking to restrain or to enjoin the
issuance, sale or delivery of the Notes, the application of the proceeds thereof
in accordance with the Indenture, or the collection or application of Revenues
or assets of the Trust pledged or to be pledged to pay the principal of and
interest on the Notes, or other pledge thereof, or in any way contesting or
affecting the validity or enforceability of the Basic Documents, or any action
on the part of the Trust contemplated by any of said documents, or that, if
adversely determined, would have a material adverse effect on the financial
condition or
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prospects of the Trust, nor, to the knowledge of the Responsible Parties, is
there any basis therefor.
(i) The Responsible Parties shall furnish such information, execute such
instruments and take such other action in cooperation with the Underwriters as
the Underwriters may reasonably request to qualify the Notes for offer and sale
under the "blue sky" laws or other securities laws and regulations of such
states and other jurisdictions of the United States as the Underwriters may
designate; provided, however, that in no event shall any of the Responsible
Parties or the Trust be obligated to qualify to do business in any jurisdiction
where it is not now so qualified or take any action that 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 subject.
(j) Between the date hereof and the Closing Date the Responsible Parties
shall not take, or cause the Trust to take, any action that would cause the
representations and warranties made herein to be untrue as of the Closing Date.
(k) The Trust is not and, after giving effect to the offering and sale
of the Notes and the application of the proceeds thereof as described in the
Prospectus, will not be an "investment company" as defined in the Investment
Company Act of 1940, as amended (the "1940 Act").
(l) None of the Responsible Parties has taken, nor will any of them
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
Responsible Parties.
(m) For the period beginning on the date of this Agreement and ending 90
days after the Closing Date, the Responsible Parties and any trust originated,
directly or indirectly, by the Responsible Parties will not, 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.
(n) 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 Responsible Parties or the Trust any brokerage or finder's fee
or other fee or commission as a result of any of the transactions contemplated
by this Agreement.
4. Representations and Warranties of the Seller. The Seller represents
and warrants to and agrees with the Underwriters that:
(a) The Seller is a duly organized and validly existing corporation
organized under the laws of the State of Delaware 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 conducted, except for such power
and authority the absence of which would not have a material adverse effect on
the Seller or its ability to consummate the transactions contemplated by its
Basic Documents.
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(b) The Seller has full legal right, power, and authority to enter into
its Basic Documents and to carry out, give effect to, and consummate the
transactions contemplated thereby in accordance with the terms thereof.
(c) On or before the Closing Date, its Basic Documents will have been
duly authorized, executed and delivered by the Seller. The execution, delivery
and performance of its Basic Documents and the issuance and sale of the Notes
and compliance with the terms and provisions thereof will not result in a breach
or violation of any of the terms and provisions of, or constitute a default
under, the certificate of incorporation or bylaws of the Seller or any agreement
or instrument to which the Seller is a party or by which the Seller is bound or
to which any of the properties of the Seller is subject that could reasonably be
expected to have a material adverse effect on the transactions contemplated by
the Basic Documents.
(d) There are no legal or governmental proceedings pending or, to the
knowledge of the Seller, threatened, against the Seller, or to which the Seller
or any of its properties is subject, of a character required to be disclosed in
the Prospectus that are not disclosed in the Prospectus.
(e) The Seller is not and, after giving effect to the offering and sale
of the Notes and the application of the proceeds thereof as described in the
Prospectus, will not be an "investment company" as defined in the 1940 Act.
(f) The representations and warranties made by the Seller in its Basic
Documents will be true and correct in all material respects on and as of the
Closing Date.
5. Representations and Warranties of ELS. ELS represents and warrants
to and agrees with the Underwriters that:
(a) ELS is a duly organized and validly existing corporation organized
under the laws of the State of Delaware corporation 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 conducted, except for such power
and authority the absence of which would not have a material adverse effect on
ELS or its ability to consummate the transactions contemplated by its Basic
Documents.
(b) ELS has full legal right, power, and authority to enter into its
Basic Documents and to carry out, give effect to, and consummate the
transactions contemplated thereby in accordance with the terms thereof.
(c) On or before the Closing Date, its Basic Documents will have been
duly authorized, executed and delivered by ELS. The execution, delivery and
performance of its Basic Documents and the issuance and sale of the Notes and
compliance with the terms and provisions thereof will not result in a breach or
violation of any of the terms and provisions of, or constitute a default under,
the certificate of incorporation or bylaws of ELS or any agreement or instrument
to which ELS is a party or by which ELS is bound or to which any of the
properties of ELS is
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subject that could reasonably be expected to have a material adverse effect on
the transactions contemplated by the Basic Documents.
(d) There are no legal or governmental proceedings pending or, to the
knowledge of ELS, threatened, against ELS, or to which ELS or any of its
properties is subject, of a character required to be disclosed in the Prospectus
that are not disclosed in the Prospectus.
(e) ELS is not and, after giving effect to the offering and sale of the
Notes and the application of the proceeds thereof as described in the
Prospectus, will not be an "investment company" as defined in the 1940 Act.
(f) The representations and warranties made by ELS in its Basic
Documents will be true and correct in all material respects on and as of the
Closing Date.
6. Representations and Warranties of the Depositor. The Depositor
represents and warrants to and agrees with the Underwriters that:
(a) The Depositor is duly organized and validly existing as a Delaware
limited liability company 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 conducted, except for such power and authority the absence of which
would not have a material adverse effect on the Depositor or its ability to
consummate the transactions contemplated its Basic Documents.
(b) The Depositor has full legal right, power, and authority to enter
into its Basic Documents and to carry out, give effect to, and consummate the
transactions contemplated thereby in accordance with the terms thereof.
(c) On or before the Closing Date, its Basic Documents will have been
duly authorized, executed and delivered by the Depositor. The execution,
delivery and performance of its Basic Documents and the issuance and sale of the
Notes and compliance with the terms and provisions thereof will not result in a
breach or violation of any of the terms and provisions of, or constitute a
default under, the certificate of formation or the operating agreement of the
Depositor or any agreement or instrument to which the Depositor is a party or by
which the Depositor is bound or to which any of the properties of the Depositor
is subject that could reasonably be expected to have a material adverse effect
on the transactions contemplated by the Basic Documents.
(d) There are no legal or governmental proceedings pending or, to the
knowledge of the Depositor, threatened, against the Depositor, or to which the
Depositor or any of its properties is subject, of a character required to be
disclosed in the Prospectus that are not disclosed in the Prospectus.
(e) The Depositor is not and, after giving effect to the offering and
sale of the Notes and the application of the proceeds thereof as described in
the Prospectus, will not be an "investment company" as defined in the 1940 Act.
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(f) The representations and warranties made by the Depositor in its
Basic Documents will be true and correct in all material respects on and as of
the Closing Date.
7. Agreements of the Responsible Parties. The Responsible Parties each
agree with the Underwriters as follows:
(a) The Responsible Parties will prepare a supplement to the Prospectus
setting forth the amount of the Notes covered thereby and the terms thereof not
otherwise specified in the Prospectus, the price at which the Notes are to be
purchased by the Underwriters, either the initial public offering price or the
method by which the price at which the Notes are to be sold will be determined,
the selling concessions and reallowances, if any, and such other information as
the Representative and the Responsible Parties deem appropriate in connection
with the offering of the Notes, and the Responsible Parties will timely file or
cause to be filed such supplement to the prospectus with the SEC pursuant to
Rule 424(b) under the Act, but the Responsible Parties will not file any
amendments to the Registration Statement as in effect with respect to the Notes
or any amendments or supplements to the Prospectus, unless they shall first have
delivered copies of such amendments or supplements to the Underwriters, with
reasonable opportunity to comment on such proposed amendment or supplement or if
the Underwriters shall have reasonably objected thereto promptly after receipt
thereof; the Responsible Parties will immediately advise the Representative or
its counsel (i) when notice is received from the SEC that any post-effective
amendment to the Registration Statement has become or will become effective and
(ii) of any order or communication suspending or preventing, or threatening to
suspend or prevent, the offer and sale of the Notes or of any proceedings or
examinations that may lead to such an order or communication, whether by or of
the SEC or any authority administering any state securities or Blue Sky law, as
soon as the Responsible Parties are advised thereof, and will use their
reasonable best efforts to prevent the issuance of any such order or
communication and to obtain as soon as possible its lifting, if issued.
(b) If, at any time when the Prospectus relating to the Notes is
required to be delivered under the Act, any event occurs as a result of which
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
Responsible Parties 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 Responsible Parties will immediately inform the Representative
(i) of the receipt by any of the Responsible Parties 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 any of the Responsible Parties or the Trust is a party
relating to the offering or sale of the Notes.
(d) The Responsible Parties 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.
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(e) No amendment or supplement relating to or affecting the Notes will
be made to the Registration Statement or Prospectus unless the Representative
shall have previously been advised thereof and the Representative shall not have
reasonably objected thereto after being so advised.
(f) The Responsible Parties 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 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 the Responsible Parties 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) The Responsible parties 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.
(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 Responsible Parties or the Trust, the Responsible
Parties shall cause to be furnished such documents and such other reasonable
actions to be taken.
(i) For so long as the Notes are outstanding, the Responsible Parties
will furnish to the Representative (i) as soon as available, a copy of each
document relating to the Trust or the Notes required to be filed with the SEC
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act")
or any order of the SEC thereunder, and (ii) such other information concerning
the Responsible Parties 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) For a period from the date of this Agreement until the retirement of
the Notes, the Responsible Parties will deliver or cause to be delivered to the
Representative the annual statements of compliance and the annual independent
certified public accountants' reports furnished to the Indenture Trustee or the
Trust pursuant to the Master Servicing Agreement as soon as such statements and
reports are furnished to the Indenture Trustee or the Responsible Parties.
(k) On or before the date the Financed Student Loans are transferred to
the Trust, the Trust shall ▇▇▇▇ its accounting and other records, if any,
relating to the Financed Eligible Loans and the Responsible Parties shall ▇▇▇▇
their respective computer records relating to the Financed Eligible Loans to
show the absolute ownership by the Trust Eligible Lender Trustee, as eligible
lender of, and the interest of the Trust in, the initial Financed Eligible
Loans, and from and after each Closing Date the Trust and the Responsible
Parties will take such actions with respect to the respective records of each
with regard to any additional acquired Eligible Loans at the time of the
10
acquisition thereof by the Trust Eligible Lender Trustee on behalf of the Trust,
and the Trust and the Responsible Parties shall not take, nor permit any other
person to take, any action inconsistent with the ownership of, and the interest
of the Trust in, the Financed Eligible Loans, other than as permitted by the
Basic Documents.
(l) If this Agreement shall terminate or shall be terminated after
execution and delivery pursuant to any provisions hereof (otherwise than by
notice given by an Underwriter terminating this Agreement pursuant to Section 10
or Section 11 hereof) or if this Agreement shall be terminated by the
Representative because of any failure or refusal on the part of the Responsible
Parties to comply with the terms or fulfill any of the conditions of this
Agreement, the Seller 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 Responsible Parties or
the Trust be liable to the Underwriters for loss of anticipated profits from the
transactions contemplated by this Agreement.
(m) The net proceeds from the sale of the Notes hereunder will be applied
substantially in accordance with the description set forth in the Prospectus.
(n) The Seller's sale and transfer of the Financed Eligible Loans to the
Depositor and the Depositor's sale and transfer of Financed Eligible Loans to
the order of the Trust Eligible Lender Trustee on behalf of the Trust as of the
applicable sale date will vest in the Trust Eligible Lender Trustee on behalf of
the Trust all of the Seller's and the Depositor's right, title and interest
therein, subject to no prior lien, mortgage, security interest, pledge, adverse
claim, charge or other encumbrance.
(o) The Trust's assignment of the Financed Eligible Loans to the Indenture
Trustee pursuant to the Indenture will vest in the Indenture Trustee, for the
benefit of the Noteholders, a first priority perfected security interest
therein, subject to no prior lien, mortgage, security interest, pledge, adverse
claim, charge or other encumbrance.
(p) If, at the time the Registration Statement became effective, any
information shall have been omitted therefrom in reliance upon Rule 430A under
the 1933 Act, then, immediately following the execution of this Agreement, the
Responsible Parties will prepare, and file or transmit for filing with the SEC
in accordance with such Rule 430A and Rule 424(b) under the 1933 Act, copies of
an amended Prospectus containing all information so omitted.
(q) As soon as practicable, but not later than 16 months after the date of
this Agreement, the Responsible Parties will cause the Trust to make generally
available to the Noteholders an earnings statement covering a period of at least
12 months beginning after the later of (i) the effective date of Registration
Statement, (ii) the effective date of the most recent post-effective amendment
to the Registration Statement to become effective prior to the date of this
Agreement and (iii) the date of the Trust's most recent Annual Report or Form
10-K filed with the SEC prior to the date of this Agreement, which will satisfy
the provisions of Section 11(a) of the Act.
(r) For the period beginning on the date of this Agreement and ending 90
days after the Closing Date, the Responsible Parties and any trust originated,
directly or indirectly, by the
11
Responsible Parties will not, 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.
8. Indemnification and Contribution. (a) The Responsible Parties agree to
jointly and severally 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 Supplement dated March 31, 2003 (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 Responsible Parties by
or on behalf of any Underwriter through the Representative expressly for use
therein, it being understood that the only such information furnished by the
Underwriter consists of the information described as such in Section 13 of this
Agreement; 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.
(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 Responsible Parties, such Underwriter or
such controlling person shall promptly notify the parties against whom
indemnification is being sought (the "indemnifying parties"), but the omission
so to notify the indemnifying party will not relieve it from any liability which
it may have to an indemnified party except to the extent that the indemnifying
party is materially prejudiced by such omission. 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 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
12
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 Responsible Parties and their respective directors and officers,
and any person who controls the Responsible Parties 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 Responsible Parties 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,
it being understood that the only such information furnished by the Underwriters
consists of the information described in Section 13 of this Agreement. If any
action, suit or proceeding shall be brought against the Responsible Parties, any
of their 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 Responsible Parties by paragraph
(b) above (except that if the Responsible Parties 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 Responsible Parties, their
respective directors and officers, and any such controlling person shall have
the rights and duties given to such Underwriter by paragraph (b) above.
(d) If the indemnification provided for in this Section 8 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 Responsible
Parties 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 Responsible Parties
13
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 Responsible Parties 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 Responsible Parties bear to the total underwriting
discounts and commissions received by such Underwriter. The relative fault of
the Responsible Parties 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 Responsible
Parties 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 Responsible Parties and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 8 were determined by
a pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in paragraph (d) above. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities and expenses referred to in paragraph (d) above
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating any claim or defending any such action, suit or
proceeding. Notwithstanding the provisions of this Section 8, no Underwriter
shall be required to contribute any amount in excess of the underwriting
discounts and commissions applicable to the Notes hereunder. 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 8 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 8 and the
representations and warranties of the Responsible Parties and the Underwriters
set forth in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of an Underwriter, the
Responsible Parties 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, any of the Responsible Parties 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 8.
9. Conditions of Closing. The obligations of the Underwriters hereunder
shall be subject (a) to the performance by the Trust of its obligations to be
performed hereunder or under the Indenture at or prior to the Closing, (b) to
the accuracy of and compliance with the representations, warranties and
covenants of the Responsible Parties contained herein, in each case as of the
time of delivery of this Agreement and as of the Closing, and (c) in the
discretion of the Underwriters, to the following further conditions:
14
(a) All actions required to be taken and all filings required to be made by
the Responsible Parties and the Trust 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 Responsible Parties or the Underwriters, shall be
contemplated by the SEC.
(b) 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, 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 Responsible Parties not contemplated by
the Registration Statement, which in the opinion of the 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
Responsible Parties and their 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) None of the Responsible Parties shall have failed at or prior to the
Closing Date to have performed or complied in any material respect with any of
their respective agreements herein contained and required to be performed or
complied with by it hereunder at or prior to the Closing Date.
(d) Fitch Ratings ("Fitch"), ▇▇▇▇▇'▇ Investors Services, Inc. ("Moody's"),
and Standard & Poor's ("S&P") shall have (1) rated the Series A Notes "AAA",
"Aaa", and "AAA", respectively, and (2) rated the Series B Notes at least "A",
"A2", and "A", respectively, and there shall not have been any announcement by
any of Fitch, Moody's or S&P that (i) it is downgrading any of its ratings
assigned to the Notes or (ii) it is reviewing its ratings assigned the Notes
with a view to possible downgrading, or with negative implications, or direction
not determined.
(e) At or prior to the Closing, the Representative shall have received the
following documents:
(1) opinions of ▇▇▇▇▇▇▇▇ ▇▇▇▇ LLP, as counsel to the Responsible
Parties and the Trust, dated the Closing Date and addressed to the Trust,
the Indenture Trustee, the Representative, Fitch, Moody's and S&P in form
and substance reasonably satisfactory to the Representative and its counsel
regarding (i) general corporate authority and other matters, (ii) true
sale, non-consolidation for bankruptcy purposes and other matters, (iii)
the accuracy and completeness of the Prospectus and the Registration
Statement and certain matters arising under the Trust Indenture Act and the
1940 Act,
15
and (iv) the perfection and priority of the security interests in the
Financed Student Loans and the Trust Estate;
(2) opinions of ▇▇▇▇▇▇▇▇ & Shohl LLP, as counsel to Fifth Third Bank,
in its capacity as Indenture Trustee, Co-Owner Trustee, and Eligible Lender
Trustee, dated the Closing Date and addressed to the Trust, the Responsible
Parties, the Representative, Fitch, Moody's and S&P in form and substance
reasonably satisfactory to the Representative and its counsel, regarding
the organization and authority of the Indenture Trustee, Co-Owner Trustee,
and Eligible Lender Trustee and other matters;
(3) opinions of Squire, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., dated the Closing
Date, (i) addressed to the Representative in its capacity as counsel to the
Underwriters in form and substance reasonably satisfactory to the
Representative, and (ii) addressed to the Trust, the Responsible Parties
and the Representative in form and substance reasonably satisfactory to the
Representative regarding tax matters;
(4) opinions of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, dated the Closing Date and
addressed to Trust, the Indenture Trustee, the Representative, Fitch,
Moody's and S&P, (a) as counsel for the Owner Trustee, and (b) as special
Delaware counsel for the Trust, in each case in form and substance
reasonably satisfactory to the Representative and its counsel;
(5) an opinion of counsel for each Guarantor, dated the Closing Date
and addressed to the Trust, the Responsible Parties, the Indenture Trustee,
the Representative, Fitch, Moody's and S&P, in form and substance
reasonably acceptable to the Representative and its counsel;
(6) a certificate of each Guarantor, dated the Closing Date and signed
by the chief financial officer or other officer of the Guarantor acceptable
to the Representative, in form and substance reasonably satisfactory to the
Representative and its counsel;
(7) an opinion of counsel for each Subservicer, dated the Closing Date
and addressed to the Responsible Parties, the Indenture Trustee, the
Representative, in form and substance reasonably satisfactory to the
Representative and its counsel, Fitch, Moody's and S&P;
(8) a certificate of each Subservicer, dated the Closing Date and
signed by the chief financial officer or other officer of the Subservicer
acceptable to the Representative, in form and substance reasonably
satisfactory to the Representative and its counsel;
(9) a certificate, dated the Closing Date and signed by executive
officers of the each of the Responsible Parties to the effect that all the
representations and warranties of the Responsible Parties contained in
their Basic Documents shall be true and correct in all material respects on
and as of the date thereof and on and as of the Closing Date as if made on
and as of the Closing Date;
16
(10) A "Ratings Letter" from each of Fitch, Moody's, and S&P setting
forth the ratings required under Section 9(d) hereof and otherwise
satisfactory to the Representative and counsel to the Underwriters;
(11) Evidence satisfactory to the Representative 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 Delaware, reflecting (i) the
transfer of the interest of the Seller in the Financed Student Loans and
the proceeds thereof to the Depositor, (ii) the transfer of the interest of
the Depositor in the Financed Student Loans and the proceeds thereof to the
Trust, and (iii) the grant of the security interest by the Trust in the
Trust Estate (including the Financed Student Loans) and the proceeds
thereof to the Indenture Trustee;
(12) Note specimens and a copy of the written order of the Trust to
authenticate and deliver the Notes;
(13) An executed copy or certified copy of an executed copy of each of
the Basic Documents, each Guarantee Agreement and such further certificates
and documents as the Representative shall have reasonably requested;
(14) The letter from PricewaterhouseCoopers dated the Closing Date,
and in form and substance 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
Eligible Loans and setting forth the results of such specified procedures;
(15) Evidence satisfactory to the Representative of the completion of
all actions necessary to effect the transfer of the Financed Eligible Loans
as described in the Prospectus and the recordation thereof on the Seller's,
the Depositor's, the Trust's and the Subservicers' computer systems; and
(16) Such additional legal opinions, certificates, instruments and
other documents as the Representative or counsel to the Underwriters may
reasonably request to evidence the truth and accuracy, as of the date
hereof and as of the Closing Date, of the Responsible Parties'
representations and warranties contained herein and of the statements and
information contained in the Prospectus and the due performance and
satisfaction by the Trust at or prior to the Closing of all agreements then
to be performed and all conditions then to be satisfied by the Trust in
connection with the transactions contemplated by Basic Documents and the
Prospectus.
If the Responsible Parties shall be unable to satisfy the conditions to the
obligations of the Underwriters contained in this Agreement, this Agreement
shall terminate and neither the Underwriters nor the Responsible Parties shall
be under any further obligation hereunder, except as provided in Section 9
hereof.
10. Expenses.
17
ELS agrees to cause the Trust 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 ELS 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, and each 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 each Preliminary Prospectus and 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 certificates for the Notes; (iv) the
qualification of the Notes for offer and sale under the securities or "blue sky"
laws of such states as ELS 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 survey prepared in connection with such qualification); and (v) the fees
and/or disbursements of (A) counsel for the Trust and the Responsible Parties,
(B) the Indenture Trustee and the Eligible Lender Trustee and their counsel, (C)
the Owner Trustee and its counsel, (D) the Auction Agent and its counsel, (E)
The Depository Trust Company in connection with the book-entry registration of
the Notes, and (F) Fitch, Moody's and S&P for rating the Notes.
11. 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
Responsible Parties, by notifying the Representative, or by the Representative,
by notifying the Responsible Parties.
Any notice under this Section 11 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
12. 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 Responsible Parties, 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
18
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 Ohio, or a decision by a court of competent
jurisdiction of the States of Delaware or Ohio or any administrative tribunal of
the States of Delaware or Ohio or other governmental agency or department
thereof shall be rendered with respect to taxation by the States of Delaware or
Ohio 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 Ohio tax law 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. Notice of such termination may be given to the Responsible Parties, by
telegram, telecopy or telephone and shall be subsequently confirmed by letter.
13. Information Furnished by the Underwriter. The statements set forth
under the heading "Plan of Distribution" in the Prospectus Supplement dated
April 14, 2003 constitute the only information furnished by or on behalf of the
Underwriters as such information is referred to in Sections 3(b) and 8 hereof,
and each Underwriter confirms that such statements relating to such Underwriter
are correct.
14. Computational Materials. (a) It is understood that the Representative
may prepare and provide to prospective investors certain Computational Materials
(as defined below) in connection with the Trust's offering of the Notes, subject
to the following conditions:
(1) The Representative shall comply with all applicable laws and
regulations in connection with the use of Computational Materials including
the No-Action Letter of May 20, 1994 issued by the SEC to ▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Acceptance Corporation I, ▇▇▇▇▇▇, Peabody & Co. Incorporated and ▇▇▇▇▇▇
Structured Asset Corporation, as made applicable to other issuers and
underwriters by the SEC in response to the request of the Public Securities
Association dated May 24, 1994, and the No-Action Letter of February 17,
1995 issued by the SEC to the Public Securities Association (collectively,
the "▇▇▇▇▇▇/PSA Letters").
(2) As used herein, "Computational Materials" and the term "ABS Term
Sheets" shall have the meanings given such terms in the ▇▇▇▇▇▇/PSA Letters,
but shall include only those Computational Materials that have been
prepared or delivered to prospective investors by or at the direction of
the Representative.
(3) The Representative shall provide the Responsible Parties and the
Trust with representative forms of all Computational Materials prior to
their first use, to the extent such forms have not previously been approved
by the Responsible Parties for use by the Underwriters. The Representative
shall provide to the Responsible Parties and the Trust, for filing on Form
8-K as provided in Section 14(b) hereof, copies of all Computational
Materials that are to be filed with the SEC pursuant to the ▇▇▇▇▇▇/PSA
Letters. The Representative may provide copies of the foregoing in a
consolidated or aggregated form. All Computational Materials described in
this subsection (a)(3) must be provided to the
19
Responsible Parties not later than 12:00 p.m., New York City time, one
business day before filing thereof is required pursuant to the terms of
this Agreement.
(4) If the Representative does not provide the Computational materials
to the Responsible Parties pursuant to subsection (a)(3) above, the
Underwriters shall be deemed to have represented, as of the applicable
Closing Date, that they did not provide any prospective investors with any
information in written or electronic form in connection with the offering
of the Notes that is required to be filed with the SEC in accordance with
the ▇▇▇▇▇▇/PSA Letters.
(5) In the event of any delay in the delivery by the Representative to
the Responsible Parties and the Trust of all Computational Materials
required to be delivered in accordance with subsection (a)(3) above, the
Responsible Parties shall have the right to delay the release of the
Prospectus to investors or to the Underwriters, to delay the Closing Date
and to take other appropriate actions in each case as necessary in order to
allow the Responsible Parties and the Trust to comply with their agreement
set forth in Section 14(b) hereof to file the Computational Materials by
the time specified therein.
(b) The Responsible Parties and the Trust shall file the Computational
Materials (if any) provided to them by the Representative under Section 14(a)(3)
hereof with the SEC pursuant to a Current Report on Form 8-K no later than 5:30
p.m., New York City time, on the date required pursuant to the ▇▇▇▇▇▇/PSA
Letters
15. 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.
16. Miscellaneous.
(a) All notices, demands, and formal actions hereunder shall be in writing
and mailed, telegraphed or delivered to the following address or such other
address as either of the parties shall specify.
The Representative:
Citigroup Global Markets Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇/▇▇/ ▇▇▇▇▇
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Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
The Responsible Parties:
c/o Education Lending Services, Inc.
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▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
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(b) This Agreement will inure to the benefit of and be binding upon the
parties hereto and their successors and assigns, and will not confer any rights
upon any other Person. The terms "successors" and "assigns" shall not include
any purchaser of any of the Notes from any Underwriter merely because of such
purchase.
(c) The respective indemnities, agreements, representations, warranties
and other statements of the Responsible Parties, the Trust, or their officers
and of the Underwriters set forth in or made pursuant to this Agreement or
contained in certificates of officers of the Responsible Parties submitted
pursuant hereto shall remain operative and in full force and effect, regardless
of any investigation or statement as to the results thereof, made by or on
behalf of the Underwriters, the Responsible Parties, the Trust or any of their
respective representatives, officers of directors or any controlling person, and
will survive delivery of and payment for the Notes or termination or
cancellation of this Agreement.
(d) The indemnity agreement of the Responsible Parties contained in
Section 8 of this Agreement shall be in addition to any liability which the
Responsible Parties may otherwise have. The indemnity agreement of the
Underwriters contained in Section 8 of this Agreement shall be in addition to
any liability which the Underwriters may otherwise have.
(e) Section or paragraph headings have been inserted in this Agreement
as a matter of convenience of reference only, and it is agreed that such Section
headings are not a part of this Agreement and will not be used in the
interpretation of any provisions of this Agreement.
(f) This Agreement shall not be assigned by the Trust or the
Underwriters without the written consent of the Trust and each Underwriter.
(g) If any provision of this Agreement shall be held or deemed to be or
shall, in fact, be inoperative, invalid or unenforceable as applied in any
particular case in any jurisdiction because it conflicts with any provisions of
any constitution, statute, rule of public policy, or any other reason, such
circumstances shall not have the effect of rendering the provision in question
inoperable or unenforceable in any other case or circumstance, or of rendering
any other provision or provisions of this Agreement invalid, inoperative or
unenforceable to any extent whatever.
(h) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York applicable to contracts made or to be
performed within the State of New York without giving effect to conflict of laws
principles thereof. The Responsible Parties and the Trust hereby submit to the
non-exclusive jurisdiction of the Federal and state courts in the Borough of
Manhattan in The City of New York in any suit or proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby.
(i) Notwithstanding anything to the contrary herein or in the
Indenture, any obligation of the Trust created by or arising out of this
Agreement shall be a limited obligation of the Trust, payable solely from Trust
Estate available therefor under and in accordance with the Indenture, and shall
not constitute a charge against the general credit of the Trust.
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(j) This Agreement may be executed in several counterparts, each of
which shall be regarded as an original and all which shall constitute one and
the same document.
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Please confirm that the foregoing correctly sets forth the agreement
among the Responsible Parties, the Trust, and the Underwriters.
Very truly yours,
EDUCATION LENDING GROUP, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President - Finance
EDUCATION LENDING SERVICES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President - Finance
EDUCATION FUNDING CAPITAL I, LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President - Finance
EDUCATION FUNDING CAPITAL TRUST-II
by Fifth Third Bank, not in its
individual capacity, but solely as
Co-Owner Trustee on behalf of the Trust
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Assistant Vice President
Confirmed as of the date
first above mentioned.
Citigroup Global Markets Inc.
Acting on behalf of itself and as Representative
of the Underwriters named herein
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
APPENDIX A
Allocation of Notes between Underwriters:
Citigroup Global ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ &
Series of Notes Markets Inc. Co. Total
--------------------- ---------------------- --------------------- ---------------------
Series A-1 Notes .... $ 56,000,000 $ 24,000,000 $ 80,000,000
Series A-2 Notes .... 100,800,000 43,200,000 144,000,000
Series A-3 Notes .... 193,200,000 82,800,000 276,000,000
Series A-4 Notes .... 0 75,000,000 75,000,000
Series A-5 Notes .... 0 75,000,000 75,000,000
Series A-6 Notes .... 100,000,000 0 100,000,000
Series A-7 Notes .... 100,000,000 0 100,000,000
Series A-8 Notes .... 100,000,000 0 100,000,000
Series B-1 Notes .... 50,000,000 0 50,000,000
---------------------- --------------------- ---------------------
Total ............... $ 700,000,000 $ 300,000,000 $ 1,000,000,000
====================== ===================== =====================
Interest Rates and Purchase Price:
LIBOR Notes:
Original
Principal Underwriters'
Series of Notes Amount Interest Rate Price Fee
--------------------- --------------- ------------------------ ------- -----------------
Series A-1 Notes .... $ 80,000,000 3-Month LIBOR plus 0.05% 100% 0.2625%
Series A-2 Notes .... 144,000,000 3-Month LIBOR plus 0.10% 100% 0.3000%
Series A-3 Notes .... 276,000,000 3-Month LIBOR plus 0.30% 100% 0.3000%
A-1
Auction Rate Notes:
Original
Principal Underwriters'
Series of Notes Amount Initial Rate Price Fee
-------------------- --------------- ------------------ ------- -----------------
Series A-4 Notes ... 75,000,000 1.32% 100% 0.3000%
Series A-5 Notes ... 75,000,000 1.32% 100% 0.3000%
Series A-6 Notes ... 100,000,000 1.32% 100% 0.3000%
Series A-7 Notes ... 100,000,000 1.30% 100% 0.3000%
Series A-8 Notes ... 100,000,000 1.32% 100% 0.3000%
Series B-1 Notes ... 50,000,000 1.40% 100% 0.3000%
A-2