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EXHIBIT 1.1
Execution Copy
KEYCORP STUDENT LOAN TRUST 1999-A
$260,000,000
FLOATING RATE CLASS A-1 ASSET BACKED NOTES
$570,400,000
FLOATING RATE CLASS A-2 ASSET BACKED NOTES
KEY BANK USA, NATIONAL ASSOCIATION
(SELLER)
NOTE UNDERWRITING AGREEMENT
February 3, 1999
2
Credit Suisse First Boston Corporation
As Representative of the
several Underwriters
11 Madison Avenue
New York, N.Y. 10010
Dear Sirs:
1. Introductory. Key Bank USA, National Association, a
national banking association (the "Seller"), proposes to cause KeyCorp Student
Loan Trust 1999-A (the "Trust") to issue and sell $260,000,000 principal amount
of its Floating Rate Asset Backed Notes (the "Class A-1 Notes"), and
$570,400,000 principal amount of its Floating Rate Class A-2 Asset Backed Notes
(the "Class A-2 Notes" and together with the Class A-1 Notes, the "Notes"), to
the underwriters named in Schedule I hereto (the "Underwriters"), for whom you
(the "Representative") are acting as representative. The assets of the Trust
include, among other things, a pool of law school, medical school, dental
school, graduate business school and other graduate school student loans (the
"Financed Student Loans") and certain monies due thereunder on and after January
1, 1999 (the "Cutoff Date"). Such Financed Student Loans were sold to the
Eligible Lender Trustee (as defined below) on behalf of the Trust by the Seller
and are to be serviced by Pennsylvania Higher Education Assistance Agency, an
agency of the Commonwealth of Pennsylvania ("PHEAA" and, in its capacity as a
servicer, "Servicer") and EFS Services, Inc., a wholly-owned subsidiary of EFS,
Inc. of Indiana ("EFS" or a "Servicer"). The Notes will be issued pursuant to
the Indenture to be dated as of January 1, 1999 (as amended and supplemented
from time to time, the "Indenture"), between the Trust and Bankers Trust
Company, a New York banking corporation (the "Indenture Trustee").
Simultaneously with the issuance and sale of the Notes as
contemplated herein, the Trust will issue $34,600,000 principal amount of its
Floating Rate Asset Backed Certificates (the "Certificates"), representing a
fractional undivided ownership interest in the Trust, which will be sold
pursuant to an underwriting agreement dated the date hereof (the "Certificate
Underwriting Agreement") between the Seller and the Representative.
Capitalized terms used and not otherwise defined herein shall
have the meanings given them in Appendix A hereto.
2. Representations and Warranties of the Seller. (a) The
Seller represents and warrants to and agrees with the several Underwriters that:
(i) A registration statement (No. 333-58073), including a form
of prospectus, on Form S-3 relating to the Notes, has been filed with
the Securities and Exchange Commission (the "Commission") and either
(A) has been declared effective under the Securities Act of 1933, as
amended (the "Act"), and is not proposed to be amended or (B) is
proposed to be amended by amendment or post-effective amendment. If the
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Seller does not propose to amend such registration statement and if any
post-effective amendment to such registration statement has been filed
with the Commission prior to the execution and delivery of this
Agreement, the most recent such amendment has been declared effective
by the Commission. For purposes of this Agreement, "Effective Time"
means (x) if the Seller has advised the Representative that it does not
propose to amend such registration statement, the date and time as of
which such registration statement, or the most recent post-effective
amendment thereto (if any) filed prior to the execution and delivery of
this Agreement, was declared effective by the Commission, or (y) if the
Seller has advised the Representative that it proposes to file an
amendment or post-effective amendment to such registration statement,
the date and time as of which such registration statement, as amended
by such amendment or post-effective amendment, as the case may be, is
declared effective by the Commission. "Effective Date" means the date
of the Effective Time. Such registration statement, as amended at the
Effective Time, including all information (if any) deemed to be a part
of such registration statement as of the Effective Time pursuant to
Rule 430A(b) under the Act, and including the exhibits thereto and any
material incorporated by reference therein, is hereinafter referred to
as the "Registration Statement", and the form of prospectus relating to
the Notes, as first filed with the Commission pursuant to and in
accordance with Rule 424(b) ("Rule 424(b)") under the Act or, if no
such filing is required, as included in the Registration Statement at
the Effective Date, is hereinafter referred to as the "Prospectus".
(ii) If the Effective Time is prior to the execution and
delivery of this Agreement: (A) on the Effective Date, the Registration
Statement conformed in all material respects to the requirements of the
Act, the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), and the rules and regulations of the Commission thereunder (the
"Rules and Regulations") and did not include 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 not
misleading, (B) on the date of this Agreement, the Registration
Statement conforms, and at the time of filing of the Prospectus
pursuant to Rule 424(b), the Registration Statement and the Prospectus
will conform, in all material respects to the requirements of the Act,
the Trust Indenture Act and the Rules and Regulations, (C) on the
Effective Date, the Registration Statement did not and 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 not misleading and (D) on the Effective Date, the
Prospectus, if not filed pursuant to Rule 424(b), did not or will not,
and on the date of any filing pursuant to Rule 424(b) and on the
Closing Date, the Prospectus will not, include any untrue statement of
a material fact or omit to state a material fact necessary in order to
make the statements therein, in light of the circumstances under which
they are made, not misleading. If the Effective Time is subsequent to
the execution and delivery of this Agreement: (1) on the Effective
Date, the Registration Statement and the Prospectus will conform in all
material respects to the requirements of the Act, the Trust Indenture
Act and the Rules and Regulations, (2) on the Effective Date, the
Registration Statement will not include 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 not
misleading and (3) on the
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Effective Date, at the time of filing of the Prospectus pursuant to
Rule 424(b) and at the Closing Date, the Prospectus will not include
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. The two preceding sentences do not apply to
statements in or omissions from the Registration Statement or
Prospectus based upon written information furnished to the Seller by
any Underwriter through the Representative specifically for use
therein. As of the Closing Date (as defined below), the Seller's
representations and warranties in the Sale and Servicing Agreement, the
Supplemental Sale and Servicing Agreement, the Trust Agreement and the
Guarantee Agreement to which TERI is a party will be true and correct
in all material respects.
(iii) This Agreement has been duly authorized, executed and
delivered by the Seller. The execution, delivery and performance of
this Agreement and the issuance and sale of the Notes and compliance
with the terms and provisions hereof will not result in a breach or
violation of any of the terms and provisions of, or constitute a
default under, 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 which could reasonably be expected to have a
material adverse effect on the transactions contemplated herein. The
Seller has full corporate power and authority to cause the Trust to
authorize, issue and sell the Notes, all as contemplated by this
Agreement.
(iv) 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 Seller or any of its subsidiaries
any brokerage or finder's fee or other fee or commission as a result of
any of the transactions contemplated by this Agreement.
(v) All legal or governmental proceedings, contracts or
documents of a character required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement have been so described or filed as required.
(vi) The Seller's assignment and delivery of the Financed
Student Loans to the Eligible Lender Trustee on behalf of the Trust as
of the Closing Date will vest in the Eligible Lender Trustee on behalf
of the Trust all the Seller's right, title and interest therein, or
will result in a first priority perfected security interest therein, in
either case subject to no prior lien, mortgage, security interest,
pledge, adverse claim, charge or other encumbrance.
(vii) The Trust's assignment of the Financed Student Loans to
the Indenture Trustee pursuant to the Indenture will vest in the
Indenture Trustee, for the benefit of the holders of the Notes, a first
priority perfected security interest therein, subject to no prior lien,
mortgage, security interest, pledge, adverse claim, charge or other
encumbrance.
(viii) The Seller is not, and after giving effect to the offering
and sale of the Notes, will not be an "investment company" or an entity
"controlled" by an "investment company",
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as such terms are defined in the United States Investment Company Act
of 1940, as amended (the "Investment Company Act");
(b) The Seller hereby agrees with the Underwriters that, for
all purposes of this Agreement, the only information furnished to the Seller by
the Underwriters through the Representative specifically for use in the
Registration Statement, the Prospectus, or any amendment or supplement thereto,
or any related preliminary prospectus, are the third paragraph and the second to
last paragraph on the cover page of, and the statements under the caption
"Underwriting" in, the preliminary prospectus and the Prospectus.
3. Purchase, Sale and Delivery of the Notes. On the basis of
the representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Seller agrees to cause the Trust
to sell to the Underwriters, and the Underwriters agree, severally and not
jointly, to purchase from the Trust, at a purchase price of 99.78% of the
principal amount of the Class A-1 Notes and at a purchase price of 99.675% of
the principal amount of the Class A-2 Notes, the respective principal amounts of
each class of Notes set forth opposite the names of the Underwriters in Schedule
I hereto. In addition, the Seller agrees to cause the Underwriters to be paid an
aggregate structuring fee in connection with the structuring of the Notes and
the Certificates of $864,587.
The Seller will deliver the Notes to the Representative for
the respective accounts of the Underwriters, against payment of the purchase
price to or upon the order of the Seller by wire transfer or check in Federal
(same day) Funds, at the office of Stroock & Stroock & Lavan LLP, 180 Maiden
Lane, New York, New York 10038, on February 9, 1999, or at such other time not
later than seven full business days thereafter as the Representative and the
Seller determine, such time being herein referred to as the "Closing Date". The
Notes to be so delivered will be initially represented by one or more Notes of
each class registered in the name of Cede & Co., the nominee of The Depository
Trust Company ("DTC"). The interests of beneficial owners of the Notes will be
represented by book entries on the records of DTC and participating members
thereof. Definitive Notes will be available only under the limited circumstances
specified in the Indenture.
4. Offering by the Underwriters. It is understood that, after
the Registration Statement becomes effective, the several Underwriters propose
to offer the Notes for sale to the public (which may include selected dealers)
as set forth in the Prospectus.
5. Covenants of the Seller. The Seller covenants and agrees
with the several Underwriters that:
(a) If the Effective Time is prior to the execution and
delivery of this Agreement, the Seller will file the Prospectus, properly
completed, with the Commission pursuant to and in accordance with subparagraph
(1) (or, if applicable and if consented to by the Representative, subparagraph
(4)) of Rule 424(b) not later than the earlier of (i) the second business day
following the execution and delivery of this Agreement and (ii) the fifth
business day after the Effective Date. The Seller will advise the Representative
promptly of any such filing pursuant to Rule 424(b).
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(b) The Seller will advise the Representative promptly of any
proposal to amend or supplement the registration statement as filed or the
related prospectus or the Registration Statement or the Prospectus and will not
effect such amendment or supplementation without the consent of the
Representative prior to the Closing Date, and thereafter will not effect any
such amendment or supplementation to which the Representative reasonably
objects; the Seller will also advise the Representative promptly of any request
by the Commission for any amendment of or supplement to the Registration
Statement or the Prospectus or for any additional information; and the Seller
will also advise the Representative promptly of the effectiveness of the
Registration Statement (if the Effective Time is subsequent to the execution of
this Agreement) and of any amendment or supplement to the Registration Statement
or the Prospectus and of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the institution or
threat of any proceeding for that purpose and the Seller will use its best
efforts to prevent the issuance of any such stop order and to obtain as soon as
possible the lifting of any issued stop order.
(c) If, at any time when a prospectus relating to the Notes is
required to be delivered under the Act, any event occurs as a result of which
the Prospectus as then amended or supplemented would contain an untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend or supplement
the Prospectus to comply with the Act, the Seller promptly will prepare and
file, or cause to be prepared and filed, with the Commission an amendment or
supplement which will correct such statement or omission, or an amendment or
supplement which will effect such compliance. Neither the consent of the
Representative to, nor the delivery of the several Underwriters of, any such
amendment or supplement shall constitute a waiver of any of the conditions set
forth in Section 6.
(d) As soon as practicable, but not later than the
Availability Date (as defined below), the Seller will cause the Trust to make
generally available to the holders of the Notes an earnings statement of the
Trust covering a period of at least twelve months beginning after the Effective
Date which will satisfy the provisions of Section 11(a) of the Act and Rule 158
of the applicable Rules and Regulations thereunder. For the purpose of the
preceding sentence, "Availability Date" means the 45th day after the end of the
fourth fiscal quarter following the fiscal quarter that includes the Effective
Date, except that, if such fourth fiscal quarter is the last quarter of the
Trust's fiscal year, "Availability Date" means the 90th day after the end of
such fourth fiscal quarter.
(e) The Seller will furnish to the Representative copies of
the Registration Statement (two of which will be signed and will include all
exhibits), each related preliminary prospectus, the Prospectus and all
amendments and supplements to such documents, in each case as soon as available
and in such quantities as the Representative reasonably requests.
(f) The Seller will arrange for the qualification of the Notes
for sale under the laws of the States of New York, Hawaii and Washington D.C.
and will continue such qualifications in effect so long as required for the
distribution.
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(g) For a period from the date of this Agreement until the
retirement of the Notes, or until such time as the several Underwriters shall
cease to maintain a secondary market in the Notes, whichever occurs first, the
Seller will deliver to the Representative the annual statements of compliance
and the annual independent certified public accountants' reports furnished to
the Indenture Trustee or the Eligible Lender Trustee pursuant to the Sale and
Servicing Agreement, as soon as such statements and reports are furnished to the
Indenture Trustee or the Eligible Lender Trustee.
(h) So long as any of the Notes is outstanding, the Seller
will furnish to the Representative (i) as soon as practicable after the end of
the fiscal year all documents required to be distributed to the holders of the
Notes or filed with the Commission on behalf of the Trust pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any order
of the Commission thereunder and (ii) from time to time, any other information
concerning the Seller as the Representative may reasonably request only insofar
as such information reasonably relates to the Registration Statement or the
transactions contemplated by the Basic Documents.
(i) On or before the Closing Date, the Seller shall mark its
accounting and other records, if any, relating to the Initial Financed Student
Loans and shall cause each Servicer to mark the computer records of such
Servicer relating to the Financed Student Loans to show the absolute ownership
by the Eligible Lender Trustee on behalf of the Trust of the Financed Student
Loans, and from and after the Closing Date the Seller shall not and shall
require that any Servicer shall not take any action inconsistent with the
ownership by the Eligible Lender Trustee on behalf of the Trust of such Initial
Financed Student Loans, other than as permitted by the Sale and Servicing
Agreement.
(j) To the extent, if any, that the rating provided with
respect to the Notes by the rating agency or agencies that initially rate the
Notes is conditional at the time of issuance of the Notes upon the furnishing of
documents or the taking of any other actions by the Seller agreed upon on or
prior to the Closing Date, the Seller shall furnish such documents and take any
such other actions. A copy of any such document shall be provided to the
Representative at the time it is delivered to the rating agencies.
(k) For the period beginning on the date of this Agreement and
ending 90 days after the Closing Date, neither the Seller nor any trust
originated, directly or indirectly, by the Seller will, without the prior
written consent of the Representative, offer to sell or sell notes (other than
the Notes) collateralized by, or certificates (other than the Certificates)
evidencing an ownership interest in, student loans; provided, however, that this
shall not be construed to prevent the sale of student loans by the Seller.
(l) The Seller will apply the net proceeds of the offering and
the sale of the Notes and the Certificates that it receives in the manner set
forth in the Prospectus under the caption "Use of Proceeds."
(m) The Seller will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the printing
and filing of the documents (including the Registration Statement and
Prospectus) (ii) the preparation, issuance and delivery
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of the Notes to the Representative, (iii) the fees and disbursements of the
Seller's counsel and accountants, (iv) the qualification of the Notes under
securities laws in accordance with the provisions of Section 5(f), including
filing fees and the fees and disbursements of counsel for the Representative in
connection therewith and in connection with the preparation of any blue sky or
legal investment survey, if any is requested, (v) the printing and delivery to
the Representative of copies of the Registration Statement as originally filed
and of each amendment thereto, (vi) the printing and delivery to the
Representative of copies of any blue sky or legal investment survey prepared in
connection with the Notes, (vii) any fees charged by rating agencies for the
rating of the Notes, (viii) the fees and expenses, if any, incurred with respect
to any filing with the National Association of Securities Dealers, Inc. and (ix)
the fees and expenses of Thompson Hine & Flory LLP in its role as counsel to the
Trust incurred as a result of providing the opinions required by Section 6(h)
hereof.
6. Conditions of the Obligations of the Underwriters. The
obligations of the several Underwriters to purchase and pay for the Notes will
be subject to the accuracy of the representations and warranties on the part of
the Seller herein, to the accuracy of the written statements of officers of the
Seller made pursuant to the provisions of this Section, to the performance by
the Seller of its obligations hereunder and to the following additional
conditions precedent:
(a) If the Effective Time is not prior to the execution and
delivery of this Agreement, the Effective Time shall have occurred not later
than 6:00 p.m., New York City time, on the date of this Agreement or such later
time or date as shall have been consented to by the Representative.
(b) If the Effective Time is prior to the execution and
delivery of this Agreement, the Prospectus and any supplements thereto shall
have been filed with the Commission in accordance with the Rules and Regulations
and Section 5(a) hereof. 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 Seller or the Representative, shall be contemplated by the Commission.
(c) The Representative shall have received a letter, dated the
date of delivery thereof (which, if the Effective Time is prior to the execution
and delivery of this Agreement, shall be on or prior to the date of this
Agreement or, if the Effective Time is subsequent to the execution and delivery
of this Agreement, shall be prior to the filing of the amendment or
post-effective amendment to the Registration Statement to be filed shortly prior
to the Effective Time), of (i) Ernst & Young LLP on behalf of the Seller and
(ii) KPMG Peat Marwick LLP with respect to certain agreed-upon procedures with
respect to the Programs, in each case confirming that such accountants are
independent public accountants within the meaning of the Act and the applicable
published Rules and Regulations thereunder, and substantially in the form of the
drafts to which the Representative has previously agreed and otherwise in form
and substance reasonably satisfactory to the Representative and its counsel.
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(d) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any development
involving a prospective change, in or affecting particularly the business or
properties of the Trust, the Seller, a Servicer or KeyCorp which, in the
judgment of the Representative, materially impairs the investment quality of the
Notes or makes it impractical or inadvisable to market the Notes; (ii) any
downgrading in the rating of any debt securities of the Seller or KeyCorp by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Act), or any public announcement that any such
organization has under surveillance or review its rating of any debt securities
of the Seller or KeyCorp (other than an announcement with positive implications
of a possible upgrading, and no implication of a possible downgrading, of such
rating); (iii) any suspension or limitation of trading in securities generally
on the New York Stock Exchange, or any setting of minimum prices for trading on
such exchange; (iv) any suspension of trading of any securities of the Seller or
KeyCorp on any exchange or in the over-the-counter market; (v) any banking
moratorium declared by Federal or New York authorities; or (vi) any outbreak or
escalation of hostilities involving the United States or the declaration by the
United States of a national emergency or war, if the effect of any such event
specified in this clause (vi) in the judgment of the Representative makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Notes on the terms and in the manner contemplated in the Prospectus.
(e) The Representative shall have received an opinion of
Forrest F. Stanley, Esq., General Counsel of Key Bank USA, National Association
("Key Bank"), as counsel for Key Bank, as the Seller and the Administrator,
dated the Closing Date, in the form attached hereto as Exhibit A, or as is
otherwise satisfactory in form and substance to the Representative and its
counsel.
(f) The Representative shall have received an opinion of
Thompson Hine & Flory LLP, counsel to the Seller, dated the Closing Date, in the
form attached hereto as Exhibit B, or as is otherwise satisfactory in form and
substance to the Representative and its counsel.
(g) The Representative shall have received an opinion of
Kirkpatrick & Lockhart LLP, counsel to the Seller, dated the Closing Date and
satisfactory in form and substance to the Representative and its counsel, to the
effect that the statements in the Prospectus under the headings "Summary of
Terms--Tax Considerations" and "Income Tax Consequences--Pennsylvania Income and
Franchise Tax Consequences with Respect to the Notes" accurately describe the
material Pennsylvania tax consequences to holders of the Notes.
(h) The Representative shall have received an opinion
addressed to the several Underwriters of Thompson Hine & Flory LLP, in its
capacity as Federal tax and ERISA counsel for the Trust, to the effect that the
statements in the Prospectus under the headings "Summary of Terms--Tax
Considerations" and "Income Tax Consequences--Federal Tax Consequences with
Respect to the Notes" accurately describe the material Federal income tax
consequences to holders of the Notes, and the statements in the Prospectus under
the headings "Summary of Terms--ERISA Considerations" and "ERISA Considerations"
to the extent that they constitute statements of matters of law or legal
conclusions with respect thereto, have been prepared or
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reviewed by such counsel and accurately describe the material consequences to
holders of the Notes under ERISA. Thompson Hine & Flory LLP, in its capacity as
special counsel to the Trust, shall have delivered an opinion with respect to
the characterization of the transfer of the Initial Financed Student Loans.
(i) The Representative shall have received an opinion
addressed to the several Underwriters of Stroock & Stroock & Lavan LLP, in its
capacity as special counsel to the several Underwriters, dated the Closing Date,
with respect to the validity of the Notes and the Certificates and such other
related matters as the Representative shall reasonably require and the Seller
shall have furnished or caused to be furnished to such counsel such documents as
they may reasonably request for the purpose of enabling them to pass upon such
matters.
(j) The Representative shall have received an opinion of Dean
Blakey & Moskowitz, special student loan counsel to the Representative and, in
the case of clause (iii) below, special student loan counsel to the Eligible
Lender Trustee, dated the Closing Date, satisfactory in form and substance to
the Representative, to the effect that:
(i) the agreements implementing the Program, (including the
Coordination Agreements (as such term is defined in the Supplemental
Sale and Servicing Agreement)) and the Basic Documents, and the
transactions contemplated by the Basic Documents, conform in all
material respects to the applicable requirements of the Higher
Education Act, and that, upon the due authorization, execution and
delivery of the Basic Documents and the consummation of such
transactions, the Financed Federal Loans, legal title to which will be
held by the Eligible Lender Trustee on behalf of the Trust, will
qualify, subject to compliance with all applicable origination and
servicing requirements, for all applicable federal assistance payments,
including federal reinsurance and federal interest subsidies and
special allowance payments;
(ii) such counsel has examined the Registration Statement and
the Prospectus, and nothing has come to such counsel's attention that
would lead such counsel to believe that, solely with respect to the
Higher Education Act and the student loan business, the Registration
Statement or the Prospectus or any amendment or supplement thereto as
of the respective dates thereof or on the Closing Date contains an
untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements therein not misleading; and
(iii) 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 Federal Loans.
(k) The Representative shall have received an opinion of
counsel to PHEAA, dated the Closing Date and satisfactory in form and substance
to the Representative and its counsel, to the effect that:
(i) PHEAA has been duly organized and is validly existing as
an agency of the Commonwealth of Pennsylvania in good standing under
the laws thereof with full
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power and authority (corporate and other) to own its properties and
conduct its business, as presently conducted by it, and to enter into
and perform its obligations under the Sale and Servicing Agreement, the
Supplemental Sale and Servicing Agreement and the Guarantee Agreement
(and the agreements with the Department under Section 428 of the Higher
Education Act to the extent relevant to PHEAA's obligations under such
Guarantee Agreement) to which it is a party, and had at all relevant
times, and now has, the power, authority and legal right to service the
Financed Student Loans it is servicing, to guarantee the Financed
Federal Loans covered by such Guarantee Agreement and to receive,
subject to compliance with all applicable conditions, restrictions and
limitations of the Higher Education Act, reinsurance payments from the
Department with respect to claims paid by it on such Financed Federal
Loans.
(ii) PHEAA is duly qualified to do business and is in good
standing, and has obtained all necessary licenses and approvals in each
jurisdiction in which failure to qualify or to obtain such license or
approval would render any Financed Student Loan or PHEAA's obligation
under its Guarantee Agreement unenforceable by or on behalf of the
Trust.
(iii) Each of the Sale and Servicing Agreement, the
Supplemental Sale and Servicing Agreement and the Guarantee Agreement
(and the agreements with the Department under Section 428 of the Higher
Education Act to the extent relevant to PHEAA's obligations under such
Guarantee Agreement) to which PHEAA is a party has been duly
authorized, executed and delivered by PHEAA and is the legal, valid and
binding obligation of PHEAA enforceable against PHEAA in accordance
with its terms, notwithstanding the existence of any doctrine of
sovereign immunity except (x) the enforceability thereof may be subject
to bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights and (y)
the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought.
(iv) Neither the execution and delivery by PHEAA of the Sale
and Servicing Agreement, the Supplemental Sale and Servicing Agreement
or the Guarantee Agreement to which it is a party, nor the consummation
by PHEAA of the transactions contemplated therein nor the fulfillment
of the terms thereof by PHEAA will conflict with, result in a breach,
violation or acceleration of, or constitute a default under, any term
or provision of the certificate of incorporation or by-laws of PHEAA or
of any indenture or other agreement or instrument to which PHEAA is a
party or by which PHEAA is bound, or result in a violation of or
contravene the terms of any statute, order or regulation applicable to
PHEAA of any court, regulatory body, administrative agency or
governmental body having jurisdiction over PHEAA.
(v) There are no actions, proceedings or investigations
pending or, to the best of such counsel's knowledge after due inquiry,
threatened against PHEAA before or by any governmental authority that
might materially and adversely affect the performance by
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PHEAA of its obligations under, or the validity or enforceability of,
the Sale and Servicing Agreement, the Supplemental Sale and Servicing
Agreement or the Guarantee Agreement (or the agreements with the
Department under Section 428 of the Higher Education Act to the extent
relevant to PHEAA's obligations under such Guarantee Agreement) to
which it is a party.
(vi) Nothing has come to such counsel's attention that would
lead such counsel to believe that the representations and warranties of
PHEAA contained in the Sale and Servicing Agreement and the
Supplemental Sale and Servicing Agreement are other than as stated
therein.
(l) The Representative shall have received an opinion of
counsel to EFS, dated the Closing Date and satisfactory in form and substance to
the Representative and its counsel, to the effect that:
(i) EFS has been duly organized and is validly existing as an
Indiana 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 presently conducted by it, and to enter into
and perform its obligations under the Sale and Servicing Agreement and
the Supplemental Sale and Servicing Agreement, and had at all relevant
times, and now has, the power, authority and legal right to service the
Financed Student Loans it is servicing.
(ii) Each of the Sale and Servicing Agreement and the
Supplemental Sale and Servicing Agreement has been duly authorized,
executed and delivered by EFS and is the legal, valid and binding
obligation of EFS enforceable against EFS in accordance with its terms,
except (x) the enforceability thereof may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights and (y) the remedy of
specific performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(iii) Neither the execution and delivery by EFS of the Sale
and Servicing Agreement or the Supplemental Sale and Servicing
Agreement, nor the consummation by EFS of the transactions contemplated
therein nor the fulfillment of the terms thereof by EFS will conflict
with, result in a breach, violation or acceleration of, or constitute a
default under, any term or provision of the certificate of
incorporation or by-laws of EFS or of any indenture or other agreement
or instrument to which EFS is a party or by which EFS is bound, or
result in a violation of or contravene the terms of any statute, order
or regulation applicable to EFS of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
EFS.
(iv) There are no actions, proceedings or investigations
pending or, to the best of such counsel's knowledge after due inquiry,
threatened against EFS before or by any governmental authority that
might materially and adversely affect the performance by EFS
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of its obligations under, or the validity or enforceability of, the
Sale and Servicing Agreement or the Supplemental Sale and Servicing
Agreement.
(v) Nothing has come to such counsel's attention that would
lead such counsel to believe that the representations and warranties of
EFS contained in the Sale and Servicing Agreement and the Supplemental
Sale and Servicing Agreement are other than as stated therein.
(m) The Representative shall have received an opinion of
counsel to the Massachusetts Higher Education Assistance Corporation, now doing
business as American Student Assistance, a Massachusetts non-profit corporation
("ASA"), dated the Closing Date and satisfactory in form and substance to the
Representative and its counsel, to the effect that:
(i) ASA has been duly incorporated and is validly existing as
a non-profit corporation in good standing under the laws of the
Commonwealth of Massachusetts with full power and authority (corporate
and other) to own its properties and conduct its business, as presently
conducted by it, and to enter into and perform its obligations under
the Guarantee Agreement (and the agreements with the Department under
Section 428 of the Higher Education Act to the extent relevant to ASA's
obligations under such Guarantee Agreement) to which it is a party, and
had at all relevant times, and now has, the power, authority and legal
right to guarantee the Financed Federal Loans covered by such Guarantee
Agreement and to receive, subject to compliance with all applicable
conditions, restrictions and limitations of the Higher Education Act,
reinsurance payments from the Department with respect to claims paid by
it on such Financed Federal Loans.
(ii) ASA is duly qualified to do business and is in good
standing, and has obtained all necessary licenses and approvals in each
jurisdiction in which failure to qualify or to obtain such license or
approval would render ASA's obligation under its Guarantee Agreement to
guarantee the Financed Federal Loans covered thereby unenforceable by
or on behalf of the Trust.
(iii) The Guarantee Agreement (and the agreements with the
Department under Section 428 of the Higher Education Act to the extent
relevant to ASA's obligations under such Guarantee Agreement) to which
ASA is a party has been duly authorized, executed and delivered by ASA
and is the legal, valid and binding obligation of ASA enforceable
against ASA in accordance with its terms, except (x) the enforceability
thereof may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights and (y) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(iv) Neither the execution and delivery by ASA of the
Guarantee Agreement to which it is a party, nor the consummation by ASA
of the transactions contemplated therein nor the fulfillment of the
terms thereof by ASA will conflict with, result in a
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breach, violation or acceleration of, or constitute a default under,
any term or provision of the certificate of incorporation or by-laws of
ASA or of any indenture or other agreement or instrument to which ASA
is a party or by which ASA is bound, or result in a violation of or
contravene the terms of any statute, order or regulation applicable to
ASA of any court, regulatory body, administrative agency or
governmental body having jurisdiction over ASA.
(v) There are no actions, proceedings or investigations
pending or, to the best of such counsel's knowledge after due inquiry,
threatened against ASA before or by any governmental authority that
might materially and adversely affect the performance by ASA of its
obligations under, or the validity or enforceability of, the Guarantee
Agreement (or the agreements with the Department under Section 428 of
the Higher Education Act to the extent relevant to ASA's obligations
under such Guarantee Agreement) to which it is a party.
(n) The Representative shall have received an opinion of
counsel to the Nebraska Student Loan Program ("NSLP"), dated the Closing Date
and satisfactory in form and substance to the Representative and its counsel, to
the effect that:
(i) NSLP has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Nebraska
with full power and authority (corporate and other) to own its
properties and conduct its business, as presently conducted by it, and
to enter into and perform its obligations under the Guarantee Agreement
(and the agreements with the Department under Section 428 of the Higher
Education Act to the extent relevant to NSLP's obligations under such
Guarantee Agreement) to which it is a party, and had at all relevant
times, and now has, the power, authority and legal right to guarantee
the Financed Federal Loans covered by such Guarantee Agreement and to
receive, subject to compliance with all applicable conditions,
restrictions and limitations of the Higher Education Act, reinsurance
payments from the Department with respect to claims paid by it on such
Financed Federal Loans.
(ii) NSLP is duly qualified to do business and is in good
standing, and has obtained all necessary licenses and approvals in each
jurisdiction in which failure to qualify or to obtain such license or
approval would render NSLP's obligation under its Guarantee Agreement
to guarantee the Financed Federal Loans covered thereby unenforceable
by or on behalf of the Trust.
(iii) The Guarantee Agreement (and the agreements with the
Department under Section 428 of the Higher Education Act to the extent
relevant to NSLP's obligations under such Guarantee Agreement) to which
NSLP is a party has been duly authorized, executed and delivered by
NSLP and is the legal, valid and binding obligation of NSLP enforceable
against NSLP in accordance with its terms, except (x) the
enforceability thereof may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights and (y) the remedy of specific
performance
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and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(iv) Neither the execution and delivery by NSLP of the
Guarantee Agreement to which it is a party, nor the consummation by
NSLP of the transactions contemplated therein nor the fulfillment of
the terms thereof by NSLP will conflict with, result in a breach,
violation or acceleration of, or constitute a default under, any term
or provision of the certificate of incorporation or by-laws of NSLP or
of any indenture or other agreement or instrument to which NSLP is a
party or by which NSLP is bound, or result in a violation of or
contravene the terms of any statute, order or regulation applicable to
NSLP of any court, regulatory body, administrative agency or
governmental body having jurisdiction over NSLP.
(v) There are no actions, proceedings or investigations
pending or, to the best of such counsel's knowledge after due inquiry,
threatened against NSLP before or by any governmental authority that
might materially and adversely affect the performance by NSLP of its
obligations under, or the validity or enforceability of, the Guarantee
Agreement (or the agreements with the Department under Section 428 of
the Higher Education Act to the extent relevant to NSLP's obligations
under such Guarantee Agreement) to which it is a party.
(o) The Representative shall have received an opinion of
counsel to the Educational Credit Management Corporation ("ECMC"), dated the
Closing Date and satisfactory in form and substance to the Representative and
its counsel, to the effect that:
(i) ECMC has been duly incorporated and is validly existing as
a non-profit corporation in good standing under the laws of the State
of Minnesota with full power and authority (corporate and other) to own
its properties and conduct its business, as presently conducted by it,
and to enter into and perform its obligations under the Guarantee
Agreement (and the agreements with the Department under Section 428 of
the Higher Education Act to the extent relevant to ECMC's obligations
under such Guarantee Agreement) to which it is a party, and had at all
relevant times, and now has, the power, authority and legal right to
guarantee the Financed Federal Loans covered by such Guarantee
Agreement and to receive, subject to compliance with all applicable
conditions, restrictions and limitations of the Higher Education Act,
reinsurance payments from the Department with respect to claims paid by
it on such Financed Federal Loans.
(ii) ECMC is duly qualified to do business and is in good
standing, and has obtained all necessary licenses and approvals in each
jurisdiction in which failure to qualify or to obtain such license or
approval would render ECMC's obligation under its Guarantee Agreement
to guarantee the Financed Federal Loans covered thereby unenforceable
by or on behalf of the Trust.
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(iii) The Guarantee Agreement (and the agreements with the
Department under Section 428 of the Higher Education Act to the extent
relevant to ECMC's obligations under such Guarantee Agreement) to which
ECMC is a party has been duly authorized, executed and delivered by
ECMC and is the legal, valid and binding obligation of ECMC enforceable
against ECMC in accordance with its terms, except (x) the
enforceability thereof may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights and (y) the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
(iv) Neither the execution and delivery by ECMC of the
Guarantee Agreement to which it is a party, nor the consummation by
ECMC of the transactions contemplated therein nor the fulfillment of
the terms thereof by ECMC will conflict with, result in a breach,
violation or acceleration of, or constitute a default under, any term
or provision of the certificate of incorporation or by-laws of ECMC or
of any indenture or other agreement or instrument to which ECMC is a
party or by which ECMC is bound, or result in a violation of or
contravene the terms of any statute, order or regulation applicable to
ECMC of any court, regulatory body, administrative agency or
governmental body having jurisdiction over ECMC.
(v) There are no actions, proceedings or investigations
pending or, to the best of such counsel's knowledge after due inquiry,
threatened against ECMC before or by any governmental authority that
might materially and adversely affect the performance by ECMC of its
obligations under, or the validity or enforceability of, the Guarantee
Agreement (or the agreements with the Department under Section 428 of
the Higher Education Act to the extent relevant to ECMC's obligations
under such Guarantee Agreement) to which it is a party.
(p) The Representative shall have received an opinion of
Kotin, Crabtree & Strong, counsel to The Education Resources Institute, Inc., a
Massachusetts non-profit corporation ("TERI"), dated the Closing Date and
satisfactory in form and substance to the Representative and its counsel, to the
effect that:
(i) TERI has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the Commonwealth of
Massachusetts with full power and authority (corporate and other) to
own its properties and conduct its business, as presently conducted by
it, and to enter into and perform its obligations under the Guarantee
Agreement to which it is a party, and had at all relevant times, and
now has, the power, authority and legal right to guarantee the Financed
Private Loans covered by such Guarantee Agreement.
(ii) TERI is duly qualified to do business and is in good
standing, and has obtained all necessary licenses and approvals in each
jurisdiction in which failure to qualify or to obtain such license or
approval would render TERI's obligation under its Guarantee Agreement
to guarantee the Financed Private Loans unenforceable by or on behalf
of the Trust.
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(iii) The Guarantee Agreement to which TERI is a party has
been duly authorized, executed and delivered by TERI and is the legal,
valid and binding obligation of TERI enforceable against TERI in
accordance with its terms, except (x) the enforceability thereof may be
subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
and (y) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor may be
brought.
(iv) Neither the execution and delivery by TERI of the
Guarantee Agreement to which it is a party, nor the consummation by
TERI of the transactions contemplated therein nor the fulfillment of
the terms thereof by TERI will conflict with, result in a breach,
violation or acceleration of, or constitute a default under, any term
or provision of the certificate of incorporation or by-laws of TERI or
of any indenture or other agreement or instrument to which TERI is a
party or by which TERI is bound, or result in a violation of or
contravene the terms of any statute, order or regulation applicable to
TERI of any court, regulatory body, administrative agency or
governmental body having jurisdiction over TERI.
(v) There are no actions, proceedings or investigations
pending or, to the best of such counsel's knowledge after due inquiry,
threatened against TERI before or by any governmental authority that
might materially and adversely affect the performance by TERI of its
obligations under, or the validity or enforceability of, the Guarantee
Agreement to which it is a party.
(q) The Representative shall have received an opinion of counsel to
HEMAR Insurance Company of America, an indirect subsidiary of SLM Holding
Corporation ("HICA"), dated the Closing Date and satisfactory in form and
substance to the Representative and its counsel, to the effect that:
(i) HICA has been duly incorporated and is validly existing as
a for profit insurance corporation in good standing under the laws of
the state of South Dakota with full power and authority (corporate and
other) to own its properties and conduct its business, as presently
conducted by it, and to enter into and perform its obligations under
the Surety Bonds and the Endorsement described in the preliminary
prospectus dated January 29, 1999 and the Prospectus dated February 3,
1999 and had at all relevant times, and now has, the power, authority
and legal right to insure the Financed Private Loans covered by such
Surety Bonds and the Endorsement thereto. The Financed Private Loans
are subject to the terms and conditions of the Surety Bonds and the
Endorsement under which they have been insured.
(ii) HICA is duly qualified to do business and is in good
standing, and has obtained all necessary licenses and approvals in each
jurisdiction in which failure to
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qualify or to obtain such license or approval would render HICA's
obligation under the Surety Bonds and the Endorsement thereto to insure
the Financed Private Loans unenforceable by or on behalf of the Trust.
(iii) The Surety Bonds and the Endorsement thereto to which
HICA is a party have been duly authorized, executed and delivered by
HICA and are the legal, valid and binding obligations of HICA
enforceable against HICA in accordance with its terms, except (x) the
enforceability thereof may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights and (y) the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
(iv) Neither the execution and delivery by HICA of the Surety
Bonds and the Endorsement thereto to which it is a party, nor the
consummation by HICA of the transactions contemplated therein nor the
fulfillment of the terms thereof by HICA will conflict with, result in
a breach, violation or acceleration of, or constitute a default under,
any term or provision of the certificate of incorporation or by-laws of
HICA or of any indenture or other agreement or instrument to which HICA
is a party or by which HICA is bound, or result in a violation of or
contravene the terms of any statute, order or regulation applicable to
HICA of any court, regulatory body, administrative agency or
governmental body having jurisdiction over HICA.
(v) There are no actions, proceedings or investigations
pending or, to the best of such counsel's knowledge after due inquiry,
threatened against HICA before or by any governmental authority that
might materially and adversely affect the performance by HICA of its
obligations under, or the validity or enforceability of, the Surety
Bonds and the Endorsement thereto to which it is a party.
(r) The Representative shall have received an opinion of
Seward & Kissel, counsel to the Indenture Trustee, dated the Closing Date and
satisfactory in form and substance to the Representative and its counsel, to the
effect that:
(i) The Indenture Trustee is a New York banking corporation
duly incorporated or organized under the laws of New York.
(ii) The Indenture Trustee has the full corporate trust power to
accept the office of indenture trustee under the Indenture, the Sale
and Servicing Agreement, the Supplemental Sale and Servicing Agreement
and the Administration Agreement.
(iii) The execution and delivery of the Indenture, the
Supplemental Sale and Servicing Agreement and the performance by the
Indenture Trustee of its obligations under the Indenture, the Sale and
Servicing Agreement, the Supplemental Sale and Servicing Agreement and
the Administration Agreement have been duly authorized by all necessary
action of the Indenture Trustee and each has been duly executed and
delivered by the Indenture Trustee.
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(iv) The Indenture, the Sale and Servicing Agreement, the
Supplemental Sale and 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 under the laws of the State of New York and the Federal law
of the United States.
(v) The execution and delivery by the Indenture Trustee of the
Indenture, the Supplemental Sale and Servicing Agreement and the
Administration Agreement and the acceptance of the Sale and 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.
(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 Sale and Servicing Agreement, the
Supplemental Sale and Servicing Agreement, the Indenture or the
Administration Agreement nor the fulfillment of the terms thereof by
the Indenture Trustee will conflict with, result in the breach or
violation of, or constitute a default under any law or the charter,
by-laws or other organizational documents of the Indenture Trustee or
the terms of any indenture or other agreement or instrument known to
such counsel and 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) There are no actions, suits or proceedings pending or, to
the best of such counsel's knowledge after due inquiry, threatened
against the Indenture Trustee (as indenture trustee under the Indenture
or in its individual capacity) before or by any governmental authority
that might materially and adversely affect the performance by the
Indenture Trustee of its obligations under, or the validity or
enforceability of, the Indenture, the Sale and Servicing Agreement, the
Supplemental Sale and Servicing Agreement or the Administration
Agreement.
(ix) The execution, delivery and performance by the Indenture
Trustee of the Indenture, the Supplemental Sale and Servicing Agreement
and the Administration Agreement, and the acceptance of the Sale and
Servicing 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 are unrelated to the transactions
contemplated in such agreements.
(s) The Representative shall have received an opinion of
counsel to the Eligible Lender Trustee, dated the Closing Date and satisfactory
in form and substance to the Representative and its counsel, to the effect that:
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(i) The Eligible Lender Trustee is a national banking
association duly incorporated or organized and validly existing under
the laws of the United States.
(ii) The Eligible Lender Trustee has the full corporate trust
power to accept the office of eligible lender trustee under the Trust
Agreement and to enter into and perform its obligations under the Trust
Agreement, the Sale and Servicing Agreement, the Supplemental Sale and
Servicing Agreement and, on behalf of the Trust, under the Indenture,
the Sale and Servicing Agreement, the Supplemental Sale and Servicing
Agreement, the Administration Agreement and the Guarantee Agreements.
(iii) The execution and delivery of the Trust Agreement, the
Sale and Servicing Agreement and the Supplemental Sale and Servicing
Agreement and, on behalf of the Trust, of the Indenture, the Sale and
Servicing Agreement, the Supplemental Sale and Servicing Agreement, the
Administration Agreement and the Guarantee Agreements, and the
performance by the Eligible Lender Trustee of its obligations under the
Trust Agreement, the Indenture, the Sale and Servicing Agreement, the
Supplemental Sale and Servicing Agreement, the Administration Agreement
and the Guarantee Agreements have been duly authorized by all necessary
action of the Eligible Lender Trustee and each has been duly executed
and delivered by the Eligible Lender Trustee.
(iv) The Trust Agreement, the Sale and Servicing Agreement, the
Supplemental Sale and Servicing Agreement and the Administration
Agreement constitute valid and binding obligations of the Eligible
Lender Trustee enforceable against the Eligible Lender Trustee in
accordance with their terms.
(v) The execution and delivery by the Eligible Lender Trustee
of the Trust Agreement, the Sale and Servicing Agreement and the
Supplemental Sale and Servicing Agreement and, on behalf of the Trust,
of the Indenture, the Sale and Servicing Agreement, the Supplemental
Sale and Servicing Agreement, the Administration Agreement and the
Guarantee Agreements do not require any consent, approval or
authorization of, or any registration or filing with, any applicable
governmental authority.
(vi) Each of the Certificates has been duly executed and
delivered by the Eligible Lender Trustee, as eligible lender trustee
and authenticating agent. Each of the Notes has been duly executed and
delivered by the Eligible Lender Trustee, on behalf of the Trust.
(vii) Neither the consummation by the Eligible Lender Trustee of
the transactions contemplated in the Sale and Servicing Agreement, the
Supplemental Sale and Servicing Agreement, the Indenture, the Trust
Agreement or the Administration Agreement nor the fulfillment of the
terms thereof by the Eligible Lender Trustee will conflict with, result
in a breach or violation of, or constitute a default under any law or
the charter, by-laws or other organizational documents of the Eligible
Lender Trustee or the terms of any indenture or other agreement or
instrument known to such counsel and to which the Eligible Lender
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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
Eligible Lender Trustee or any of its subsidiaries of any court,
regulatory body, administrative agency, governmental body or arbitrator
having jurisdiction over the Eligible Lender Trustee or any of its
subsidiaries.
(viii) There are no actions, suits or proceedings pending or, to
the best of such counsel's knowledge after due inquiry, threatened
against the Eligible Lender Trustee (as eligible lender trustee under
the Trust Agreement or in its individual capacity) before or by any
governmental authority that might materially and adversely affect the
performance by the Eligible Lender Trustee of its obligations under, or
the validity or enforceability of, the Trust Agreement, the Sale and
Servicing Agreement or the Supplemental Sale and Servicing Agreement.
(ix) The execution, delivery and performance by the Eligible
Lender Trustee of the Sale and Servicing Agreement, the Supplemental
Sale and Servicing Agreement, the Indenture, the Trust Agreement, the
Administration Agreement or any Guarantee 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 Eligible Lender Trustee that
are unrelated to the transactions contemplated in such agreements.
(t) The Representative shall have received certificates dated
the Closing Date of any two of the Chairman of the Board, the President, any
Executive Vice President, Senior Vice President or Vice President, the
Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, the
principal financial officer or the principal accounting officer of each the
Seller and the Servicers in which such officers shall state that, to the best of
their knowledge after reasonable investigation, (i) the representations and
warranties of the Seller or the Servicers, as the case may be, contained in the
Trust Agreement, the Sale and Servicing Agreement and the Supplemental Sale and
Servicing Agreement, as applicable, are true and correct in all material
respects, that the Seller or the Servicers, as the case may be, has complied
with all agreements and satisfied all conditions on its part to be performed or
satisfied under such agreements at or prior to the Closing Date, in the case of
the certificate from the Seller only, that no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are contemplated by the Commission, and
(ii) since September 30, 1998, except as may be disclosed in the Prospectus or
in such certificate, no material adverse change, or any development involving a
prospective material adverse change, in or affecting particularly the business
or properties of the Trust, the Seller or the Servicers, as applicable, has
occurred.
(u) The Representative shall have received evidence
satisfactory to it that, on or before the Closing Date, UCC-1 financing
statements have been or are being filed in the office of the Secretary of State
of the States of Ohio and New York and the Commonwealth of Pennsylvania
reflecting the transfer of the interest of the Seller in the Financed Student
Loans to the Eligible Lender Trustee on behalf of the Trust and the proceeds
thereof to the Trust and the grant of the security interest by the Trust in the
Financed Student Loans and the proceeds thereof to the Indenture Trustee.
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(v) Each class of Notes shall be rated at least at least "Aaa"
by Moody's Investors Service, Inc., and "AAA" by Fitch IBCA, Inc. and none of
the foregoing shall have placed either class of Notes under surveillance or
review with possible negative implications.
(w) The issuance of the Notes and the Certificates shall not
have resulted in a reduction or withdrawal by any Rating Agency of the current
rating of any outstanding securities issued or originated by the Seller or any
of its affiliates.
(x) On the Closing Date, $34,600,000 principal amount of the
Asset Backed Certificates shall have been issued and sold.
(y) TERI shall have furnished to the Representative a
certificate of TERI, signed by the President or any Executive Vice President,
dated the Closing Date, to the effect that the signer of such certificate has
carefully examined the Prospectus (excluding any documents incorporated by
reference therein) and this Agreement and that, to the best of his knowledge any
information with respect to TERI in the Prospectus, as of its date, did 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.
(z) PHEAA shall have furnished to the Representative a
certificate of PHEAA, signed by the President or any Senior Vice President,
dated the Closing Date, to the effect that the signer of such certificate has
carefully examined the Prospectus (excluding any documents incorporated by
reference therein) and this Agreement and that, to the best of his knowledge any
information with respect to PHEAA in the Prospectus, as of its date, did 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.
(aa) ASA shall have furnished to the Representative a
certificate of ASA, signed by the President or any Senior Vice President, dated
the Closing Date, to the effect that the signer of such certificate has
carefully examined the Prospectus (excluding any documents incorporated by
reference therein) and this Agreement and that, to the best of his knowledge any
information with respect to ASA in the Prospectus, as of its date, did 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.
(bb) EFS shall have furnished to the Representative a
certificate of EFS, signed by the President or any Executive Vice President,
dated the Closing Date, to the effect that the signer of such certificate has
carefully examined the Prospectus (excluding any documents incorporated by
reference therein) and this Agreement and that, to the best of his knowledge any
information with respect to EFS in the Prospectus, as of its date, did 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.
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(cc) NSLP shall have furnished to the Representative a
certificate of NSLP, signed by the President or any Senior Vice President, dated
the Closing Date, to the effect that the signer of such certificate has
carefully examined the Prospectus (excluding any documents incorporated by
reference therein) and this Agreement and that, to the best of his knowledge any
information with respect to NSLP in the Prospectus, as of its date, did 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.
(dd) ECMC shall have furnished to the Representative a
certificate of ECMC, signed by the President or any Senior Vice President, dated
the Closing Date, to the effect that the signer of such certificate has
carefully examined the Prospectus (excluding any documents incorporated by
reference therein) and this Agreement and that, to the best of his knowledge any
information with respect to ECMC in the Prospectus, as of its date, did 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.
(ee) HICA shall have furnished to the Representative a
certificate of HICA, signed by the President or any Senior Vice President, dated
the Closing Date, to the effect that the signer of such certificate has
carefully examined the Prospectus (excluding any documents incorporated by
reference therein) and this Agreement and that, to the best of his knowledge any
information with respect to HICA in the Prospectus, as of its date, did 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 Seller will provide or cause to be provided to the
Representative such conformed copies of such of the foregoing opinions,
certificates, letters and documents as the Representative reasonably requests.
7. Indemnification and Contribution. (a) The Seller will
indemnify and hold each Underwriter harmless against any losses, claims, damages
or liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
(x) the Registration Statement, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and (y) the
Prospectus or any amendment or supplement thereto or any related preliminary
prospectus, or arise out of or are based upon the omission or alleged omission
to state therein a material fact necessary in order to make the statements
therein, in light of the circumstances under which that were made, not
misleading and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Seller will not be liable in any such case
to the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement in or omission or
alleged omission from any of such documents in
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reliance upon and in conformity with written information furnished to the Seller
by any Underwriter through the Representative specifically for use therein.
(b) Each Underwriter will severally and not jointly indemnify
and hold harmless the Seller against any losses, claims, damages or liabilities
to which the Seller may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement, the Prospectus or
any amendment or supplement thereto or any related preliminary prospectus, or
arise out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information relating to such Underwriter furnished to the Seller by such
Underwriter through the Representative specifically for use therein, and will
reimburse any legal or other expenses reasonably incurred by the Seller in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under subsection (a) or (b) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under subsection (a) or (b) above. In case any such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party), and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof and approval by the indemnified party of the
counsel appointed by the indemnifying party, the indemnifying party will not be
liable to such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation. In no event shall
the indemnifying party be liable for fees and expenses for more than one counsel
separate from their own counsel for all indemnified parties in connection with
any one action or related actions in the same jurisdiction arising out of the
same general allegations or circumstances unless any such indemnified party
shall have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to or in
conflict with those available to the other indemnified parties and in the
judgment of such counsel it is advisable for such indemnified party to employ
separate counsel. An indemnifying party will not, without the prior written
consent of the indemnified party, settle or compromise or consent to the entry
of any judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or
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potential parties to such claim or action) unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnifying party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Seller on the one hand and the Underwriters on the other 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 Seller on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Seller on the one hand and
the Underwriters on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received by
the Seller bear to the total underwriting discounts and commissions received by
the Underwriters. The relative fault 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 Seller or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The Company and the Underwriters
agree that it would not be just and equitable if contribution pursuant to this
subsection (d) were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this subsection (d). The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities referred to in
the first sentence of this subsection (d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Notes underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, except as may be
provided in any agreement among the Underwriters relating to the offering of the
Notes. No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The obligations of the
Underwriters in this subsection (d) to contribute are several in proportion
their respective underwriting obligations and not joint.
(e) The obligations of the Seller under this Section shall be
in addition to any liability which the Seller may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
any Underwriter within the meaning of the Act;
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and the obligations of the Underwriters under this Section shall be in addition
to any liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each director of the Seller, to
each officer of the Seller who has signed the Registration Statement and to each
person, if any, who controls the Seller within the meaning of the Act.
8. Survival of Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Seller or its officers and of the several Underwriters set forth in or made
pursuant to this Agreement or contained in certificates of officers of the
Seller 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 any Underwriter, the Seller or any of their respective
representatives, officers or directors or any controlling person, and will
survive delivery of and payment for the Notes. If for any reason the purchase of
the Notes by the Underwriters is not consummated, the Seller shall remain
responsible for the expenses to be paid or reimbursed by the Seller pursuant to
Section 5 and the respective obligations of the Seller and the Underwriters
pursuant to Section 7 shall remain in effect. If for any reason the purchase of
the Notes by the Underwriters is not consummated (other than pursuant to Section
9), the Seller will reimburse the Underwriters for all out-of-pocket expenses
(including fees and disbursements of counsel) reasonably incurred by them in
connection with the offering of the Notes.
9.Failure to Purchase the Notes. If any Underwriter or
Underwriters default in their obligations to purchase its portion of the Notes
hereunder and the aggregate principal amount of the Notes that such defaulting
Underwriter or Underwriters agreed but failed to purchase does not exceed 10% of
the total principal amount of the Notes, the Representative may make
arrangements satisfactory to the Seller for the purchase of such Notes by other
persons, including any of the Underwriters, but if no such arrangements are made
by the Closing Date, the non-defaulting Underwriters shall be obligated
severally, in proportion to their respective commitments hereunder, to purchase
the Notes that such defaulting Underwriters agreed but failed to purchase. If
any Underwriter or Underwriters so default and the aggregate principal amount of
the Notes with respect to such default or defaults exceeds 10% of the total
principal amount of the Notes and arrangements satisfactory to the
Representative and the Seller for the purchase of such Notes by other persons
are not made within 36 hours after such default, this Agreement will terminate
without liability on the part of any non-defaulting Underwriter or the Seller,
except as provided in Section 7. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter or Underwriters
from liability for its default.
10. Notices. All communications hereunder will be in writing
and, if sent to the Underwriters, will be mailed, delivered or telegraphed and
confirmed to the Representative at 11 Madison Avenue, New York, NY 10010,
Attention: Joseph Fashano; if sent to the Seller, will be mailed, delivered or
telegraphed and confirmed to it at Key Bank USA, National Association, 800
Superior Avenue, Cleveland, OH 44144, Attention: Senior Vice President,
Education Lending; provided, however, that any notice to an Underwriter pursuant
to Section 7 will be mailed, delivered or telegraphed and confirmed to such
Underwriter. Any such notice will take effect at the time of receipt.
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11. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 7, and no
other person will have any right or obligations hereunder.
12. 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.
13. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. Applicable Law. This Agreement will be governed by, and
construed in accordance with, the laws of the State of New York.
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If the foregoing is in accordance with the understanding of
the Representative of our agreement, kindly sign and return to us one of the
counterparts hereof, whereupon it will become a binding agreement between the
Seller and the several Underwriters in accordance with its terms.
Very truly yours,
KEY BANK USA, NATIONAL
ASSOCIATION
By:
----------------------------------------
Name:
Title:
The foregoing Note Underwriting
Agreement is hereby confirmed
and accepted as of the date
first written above.
CREDIT SUISSE FIRST BOSTON CORPORATION
By:
----------------------------------------
Name:
Title:
Acting on behalf of itself and
as Representative of the
several Underwriters.
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SCHEDULE I
Class A-1 Class A-2
--------- ---------
Credit Suisse First Boston Corporation.......... $130,000,000 $285,200,000
McDonald Investments Inc., A KeyCorp Company.... $130,000,000 $285,200,000
Total........................................... $260,000,000 $570,400,000
30
APPENDIX A
[See Appendix A to Sale and Servicing Agreement]
31
EXHIBIT A
[Key Bank opinion]
32
EXHIBIT B
[Thompson Hine & Flory LLP opinions]