Exhibit 4.5
BROKER-DEALER AGREEMENT
(TAXABLE AUCTION RATE SERIES 1997-1 NOTES)
between
BANKERS TRUST COMPANY,
as Auction Agent
and
XXXXX XXXXXX INC.,
as Broker-Dealer
Dated as of July 1, 1997
Relating to
EDUCATION LOANS INCORPORATED
TAXABLE AUCTION RATE STUDENT LOAN ASSET-BACKED NOTES
SENIOR SERIES 1997-1G AND 1997-1H
BROKER-DEALER AGREEMENT
This BROKER-DEALER AGREEMENT (TAXABLE AUCTION RATE SERIES 1997-1 NOTES)
(the "Broker Dealer Agreement"), dated as of July 1, 1997, is by and between
Bankers Trust Company, a New York banking corporation (together with its
successors and assigns, the "Auction Agent"), pursuant to authority granted to
it in the Auction Agent Agreement, defined below, acting not in its individual
capacity, but solely as agent for Education Loans Incorporated (the
"Corporation"), a South Dakota corporation and XXXXX XXXXXX INC. (together with
its respective successors and assigns, the "Broker-Dealer").
RECITALS
The Corporation proposes to cause the Trustee, defined below, to
authenticate and deliver [$________________] aggregate principal amount of its
Taxable Auction Rate Student Loan Asset-Backed Notes, Senior Series 1997-1G (the
"Series 1997-1G Notes") and its Taxable Auction Rate Student Loan Asset-Backed
Notes, Senior Series 1997-1H (the "Series 1997-1H Notes", and together with the
Series 1997-1G Notes, the "Taxable Auction Rate Series 1997-1 Notes"). The
Taxable Auction Rate Series 1997-1 Notes are being issued under the First
Supplemental Indenture of Trust, dated as of July 1, 1997 (the "First
Supplemental Indenture"), executed in accordance with the Indenture of Trust,
dated as of July 1, 1997 (the "Indenture"), each between the Corporation and
First Bank National Association, Minneapolis, Minnesota (together with its
successors and assigns, the "Trustee"). The Taxable Auction Rate Series 1997-1
Notes are being issued as adjustable rate securities.
The First Supplemental Indenture provides that the Auction Rate Series
1997-1 Note Interest Rate for each Interest Period after the Initial Interest
Period shall equal the lesser of the Net Loan Rate and the Auction Rate, but in
no event shall exceed 18% per annum with respect to the Taxable Auction Rate
Series 1997-1 Notes.
Pursuant to Section 2.9 (a) of the Auction Agent Agreement (Taxable Auction
Rate Series 1997-1 Notes), dated as of July 1, 1997, among the Trustee, the
Auction Agent and the Corporation (the "Auction Agent Agreement"), the Trustee
has directed the Auction Agent to execute and deliver this Broker-Dealer
Agreement.
The Auction Procedures require the participation of one or more Broker-
Dealers.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Auction Agent, as agent of the Corporation, and the
Broker-Dealer agree as follows:
Section 1. Definitions and Rules of Construction
1.1. Terms Defined by Reference to the First Supplemental Indenture.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings given such terms in the First Supplemental Indenture.
1.2. Terms Defined Herein. As used herein and in the Settlement
Procedures, defined below, the following terms shall have the following
meanings, unless the context otherwise requires:
"Applicable Auction Rate Series 1997-1 Note Interest Rate" shall mean the
Auction Rate Series 1997-1 Note Interest Rate as defined in the First
Supplemental Indenture.
"Authorized Officer" shall mean, with respect to the Auction Agent, each
Managing Director, Vice President, Assistant Vice President and Assistant
Treasurer and every other officer of the Auction Agent assigned to its Corporate
Trust and Agency Group and every other officer or employee of the Auction Agent
designated as an "Authorized Officer" for purposes of this Agreement in a
communication to the Broker-Dealer.
"Broker-Dealer Officer" shall mean each officer or employee of the Broker-
Dealer designated as a "Broker-Dealer Officer" for purposes of this Broker-
Dealer Agreement in a communication to the Auction Agent.
"Beneficial Owner" shall mean a beneficial owner of any of the Taxable
Auction Rate Series 1997-1 Notes.
"Notice of Failure to Deliver or Make Payment" shall mean a notice
substantially in the form of Exhibit D hereto.
"Notice of Transfer" shall mean a notice substantially in the form of
Exhibit C hereto.
"Order Form" shall mean the form to be submitted by any Broker-Dealer on or
prior to any Auction Date substantially in the form of Exhibit B hereto.
"Settlement Procedures" shall mean the Settlement Procedures attached
hereto as Exhibit A.
1.3. Rules of Construction. Unless the context or use indicate another or
different meaning or intent, the following rules shall apply to the construction
of this Agreement;
(a) Words importing the singular number shall include the plural number and
vice versa.
-2-
(b) The captions and headings herein are solely for convenience of
reference and shall not constitute a part of this Agreement nor, shall they
affect its meaning, construction or effect.
(c) The words "hereof," "herein," "hereto," and other words of similar
import refer to this Broker-Dealer Agreement as a whole.
(d) All references herein to a particular time of day shall be to New York
City time.
(e) The rights and duties of the Broker-Dealer and the Auction Agent under
this Broker-Dealer Agreement shall apply to all series of the Taxable Auction
Rate Series 1997-1 Notes, but separately. References to "Taxable Auction Rate
Series 1997-1 Notes," unless the context clearly contemplates a reference to all
Taxable Auction Rate Series 1997-1 Notes shall refer only to the Series 1997-1G
Notes as to rights and duties regarding Series 1997-1G Notes; and only to the
Series 1997-1H Notes as to rights and duties regarding Series 1997-1H Notes.
Section 2. The Auction
2.1. Incorporation by Reference of Auction Procedures and Settlement
Procedures.
(a) On each Auction Date, the provisions of the Auction Procedures will be
followed by the Auction Agent for the purpose of determining the Applicable
Auction Rate Series 1997-1 Note Interest Rate for each Auction Period after the
Initial Interest Period. Each periodic operation of such procedures is
hereinafter referred to as an "Auction".
(b) All of the provisions contained in the Auction Procedures and the
Settlement Procedures are incorporated herein by reference in their entirety and
shall be deemed to be a part of this Broker-Dealer Agreement to the same extent
as if such provisions were fully set forth herein.
(c) The Broker-Dealer and other Broker-Dealers may participate in Auctions
for their own accounts.
2.2. Preparation for Each Auction.
(a) Not later than 9:30 A.M. on each Auction Date for the Taxable Auction
Rate Series 1997-1 Notes, the Auction Agent shall advise the Broker-Dealer by
telephone of the All Hold Rate, the Maximum Auction Rate, the Net Loan Rate and
the One-month LIBOR or the Three-month LIBOR, as the case may be.
-3-
(b) If the Auction Date for any Auction shall be changed after the Auction
Agent has given notice of such Auction Date pursuant to clause (vii) of
paragraph (a) of the Settlement Procedures, the Auction Agent, by telephone
(confirmed in writing), telecopy or such other means as the Auction Agent deems
practicable, shall give notice of such change to the Broker-Dealer not later
than the earlier of 9:15 A.M. on the new Auction Date and 9:15 A.M. on the old
Auction Date. Thereafter, the Broker-Dealer shall use its best efforts to
promptly notify its customers who are Existing Holders of such change in the
Auction Date.
(c) From time to time upon request of the Auction Agent pursuant to
Section 2.2(d) of the Auction Agent Agreement, the Broker-Dealer shall provide
the Auction Agent with a statement of the aggregate amount of each series of
Taxable Auction Rate Series 1997-1 Notes held by the Broker-Dealer as an
Existing Holder for its own account or otherwise, as well as with a list of the
Broker-Dealer's customers that the Broker-Dealer believes are Existing Holders
of either series of the Taxable Auction Rate Series 1997-1 Notes (listed by
series) and the aggregate principal amount of each series of Taxable Auction
Rate Series 1997-1 Notes beneficially owned by each such customer. Except as
permitted by Section 2.10 of the Auction Agent Agreement, the Auction Agent
shall keep confidential any such information and shall not disclose any such
information so provided to any person other than the Broker-Dealer, the Issuer
and the Trustee, provided that the Auction Agent reserves the right to disclose
any such information if it is advised by its counsel that its failure to do so
would be unlawful.
(d) The Auction Agent shall send by telecopy or other means a copy of any
Notice of Taxable Auction Rate Series 1997-1 Notes Outstanding received from the
Trustee to the Broker-Dealer in accordance with Section 4.3 hereof.
2.3. Auction Schedule: Method of Submission of Orders.
(a) The Auction Agent shall conduct Auctions for the Taxable Auction Rate
Series 1997-1 Notes in accordance with the schedule set forth below. Such
schedule may be changed by the Auction Agent with the consent of the Trustee and
the Market Agent, which consent shall not be unreasonably withheld or delayed.
The Auction Agent shall give written notice of any such change to the Broker-
Dealer. Such notice shall be given prior to the close of business on the
Business Day next preceding the first Auction Date on which any such change
shall be effective.
By 9:30 A.M. The Auction Agent advises the Trustee and the Broker-
Dealers of the Maximum Auction Rate, the All Hold Rate,
the Net Loan Rate and the One-month LIBOR or the Three-
month LIBOR, as the case may be, to be used in
determining the Auction Rate
-4-
under the Auction Procedures, the First Supplemental
Indenture and the Auction Agent Agreement.
9:30 A.M.- The Auction Agent assembles information communicated
12:30 P.M. to it by Broker-Dealers as provided in Section
4(c)(i) of the First Supplemental Indenture.
The Submission Deadline is 12:30 P.M.
Not earlier than The Auction Agent makes determinations pursuant
12:30 P.M. to Section 4(c)(i) of the First Supplemental
Indenture. Submitted Bids and Submitted Sell Orders are
accepted and rejected in whole or in part and Taxable
Auction Rate Series 1997-1 Notes allocated as provided
in Section 4(d) of the First Supplemental Indenture.
By approximately The Auction Agent advises the Trustee and the
3:00 P.M.* Broker-Dealers of the results of the Auction as
4:00 P.M.** provided in Section 4(c) (ii) of the First
Supplemental Indenture. The Auction Agent gives notice
of Auction results as set forth in Section 2.4(a)
hereof.
* If the Auction Rate Series 1997-1 Note Interest Rate is the Auction Rate.
** If the Auction Rate Series 1997-1 Note Interest Rate is the Net Loan Rate.
(b) The Broker-Dealer agrees to maintain a list of Potential Holders and
to contact the Potential Holders on such list on or prior to each Auction Date
for the purposes of participating in the Auction on such Auction Date.
(c) The Broker-Dealer shall submit Orders to the Auction Agent in writing
by delivering an Order Form. The Broker-Dealer shall submit separate Orders to
the Auction Agent for each Potential Holder or Existing Holder on whose behalf
the Broker-Dealer is submitting an Order and shall not net or aggregate the
Orders of different Potential Holders or Existing Holders on whose behalf the
Broker-Dealer is submitting Orders.
(d) The Broker-Dealer shall deliver to the Auction Agent (i) a Notice of
Transfer with respect to any transfer of Taxable Auction Rate Series 1997-1
Notes made through the Broker-Dealer by an Existing Holder to another person
other than pursuant to an Auction, and (ii) a Notice of Failure to Deliver or
Make Payment with respect to the failure of any Auction Rate Series 1997-1 Note
Interest Rate to be transferred to or payment to be made by any
-5-
person that purchased or sold Taxable Auction Rate Series 1997-1 Notes through
the Broker-Dealer pursuant to a prior Auction. The Auction Agent is not required
to accept any notice delivered pursuant to clauses (i) or (ii) of this
subparagraph (d) with respect to an Auction unless it is received by the Auction
Agent by 3:00 P.M. on the Business Day next preceding such Auction Date.
(e) The Broker-Dealer agrees to handle its customers' Orders in accordance
with its duties under applicable securities laws and rules.
2.4. Notices.
(a) On each Auction Date, the Auction Agent shall notify the Broker-Dealer
by telephone of the results of the Auction as set forth in paragraph (a) of the
Settlement Procedures. The Auction Agent shall by 10:30 A.M. on the Business Day
next succeeding such Auction Date if previously requested by the Broker-Dealer
notify the Broker-Dealer in writing of the disposition of all Orders submitted
by the Broker-Dealer in the Auction held on such Auction Date.
(b) The Broker-Dealer shall notify each Existing Holder or Potential
Holder on whose behalf the Broker-Dealer has submitted an Order as set forth in
paragraph (b) of the Settlement Procedures and take such other action as is
required by the Broker-Dealer pursuant to the Settlement Procedures.
(c) The Auction Agent shall deliver to the Broker-Dealer all notices and
certificates that the Auction Agent is required to deliver to the Broker-Dealer
pursuant to Section 2 of the Auction Agent Agreement at the times and in the
manner set forth in the Auction Agent Agreement.
2.5. Service Charge to Be Paid to the Broker-Dealer. Not later than 2:00
P.M. on each Interest Payment Date with respect to each Interest Period that
immediately follows an Auction Date, the Auction Agent shall pay to the Broker-
Dealer a fee, from monies received from the Trustee, in an amount equal to the
product of (i) the Broker-Dealer Fee Rate times (ii) a fraction, the numerator
of which is the number of days in the Interest Period related to the Auction by
which the Applicable Auction Rate Series 1997-1 Note Interest Rate was
determined and the denominator of which is 360 times (iii) the sum of (A) the
aggregate principal amount of Taxable Auction Rate Series 1997-1 Notes placed by
the Broker-Dealer in such Auction that were (x) the subject of Submitted Bids of
Existing Holders submitted by the Broker-Dealer and continued to be held as a
result of such submission and (y) the subject of Submitted Bids of Potential
Holders submitted by the Broker-Dealer and purchased as a result of such
submission, plus (B) the aggregate principal amount of Taxable Auction Rate
Series 1997-1 Notes subject to valid Hold Orders submitted to the Auction Agent
-6-
by the Broker-Dealer plus (C) the aggregate principal amount of Taxable Auction
Rate Series 1997-1 Notes that were covered by Hold Orders deemed to have been
submitted by Existing Holders that were acquired by such Existing Holders
through the Broker-Dealer. For purposes of subclause (iii) (C) above, if any
Existing Holder who acquired Taxable Auction Rate Series 1997-1 Notes through
the Broker-Dealer transfers those Taxable Auction Rate Series 1997-1 Notes to
another person other than pursuant to an Auction, then the Broker-Dealer shall
continue to be the Broker-Dealer through which the Taxable Auction Rate Series
1997-1 Notes so transferred were acquired; provided, however, that if the
transfer was effected by, or if the transferee is a Broker-Dealer other than the
Broker-Dealer, then such other Broker-Dealer shall be the Broker-Dealer through
which such Taxable Auction Rate Series 1997-1 Notes were acquired.
2.6. Settlement.
(a) If any Existing Holder on whose behalf the Broker-Dealer has submitted
a Bid or Sell Order for Taxable Auction Rate Series 1997-1 Notes that was
accepted in whole or in part fails to instruct its Participant to deliver the
Taxable Auction Rate Series 1997-1 Notes subject to such Bid or Sell Order
against payment therefor, the Broker-Dealer shall instruct such Participant to
deliver such Taxable Auction Rate Series 1997-1 Notes against payment therefor
and the Broker-Dealer may deliver to the Potential Holder on whose behalf the
Broker-Dealer submitted a Bid that was accepted in whole or in part, a principal
amount of the Taxable Auction Rate Series 1997-1 Notes that is less than the
principal amount of the Taxable Auction Rate Series 1997-1 Notes specified in
such Bid to be purchased by such Potential Holder. Notwithstanding the foregoing
terms of this Section, any delivery or nondelivery of Taxable Auction Rate
Series 1997-1 Notes that represents any departure from the results of an
Auction, as determined by the Auction Agent, shall be of no effect unless and
until the Auction Agent shall have been notified of such delivery or non-
delivery in accordance with the terms of Section 2.3(d) hereof. The Auction
Agent shall have no duty or liability with respect to enforcement of this
Section 2.6(a).
(b) Neither the Auction Agent, the Trustee, nor the Corporation shall have
any responsibility or liability with respect to the failure of an Existing
Holder, a Potential Holder or its respective Participant to deliver Taxable
Auction Rate Series 1997-1 Notes or to pay for Taxable Auction Rate Series 1997-
1 Notes sold or purchased pursuant to the Auction Procedures or otherwise. The
Auction Agent shall have no responsibility for any adjustment to the fees paid
pursuant to Section 2.5 hereof as a result of any failure described in this
Section 2.6(b).
-7-
Section 3. The Auction Agent.
3.1. Duties and Responsibilities.
(a) The Auction Agent is acting hereunder solely as agent for the
Corporation and owes no fiduciary duties to any person by reason of this Broker-
Dealer Agreement.
(b) The Auction Agent undertakes to perform such duties and only such
duties as are specifically set forth in this Broker-Dealer Agreement, and no
implied covenants or obligations shall be read into this Broker-Dealer Agreement
against the Auction Agent.
(c) In the absence of bad faith or negligence on its part, the Auction
Agent shall not be liable for any action taken, suffered, or omitted or for any
error of judgment made by it in the performance of its duties under this Broker-
Dealer Agreement. The Auction Agent shall not be liable for any error of
judgment made in good faith unless the Auction Agent shall have been negligent
in ascertaining (or failing to ascertain) the pertinent facts.
3.2. Rights of the Auction Agent.
(a) The Auction Agent may rely and shall be protected in acting or
refraining from acting upon any communication authorized by this Broker-Dealer
Agreement and upon any written instruction, notice request, direction, consent
report, certificate, share certificate or other instrument, paper or document
reasonably believed by it to be genuine. The Auction Agent shall not be liable
for acting upon any telephone communication authorized by this Broker-Dealer
Agreement which the Auction Agent believes in good faith to have been given by
the Trustee, a Broker-Dealer or the Corporation. The Auction Agent may record
telephone communications with the Broker-Dealers.
(b) The Auction Agent may consult with counsel of its own choice, and the
advice of such counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon.
(c) The Auction Agent shall not be required to advance, expend or risk its
own funds or otherwise incur or become exposed to financial liability in the
performance of its duties hereunder.
(d) The Auction Agent may perform its duties and exercise its rights
hereunder either directly or by or through agents or attorneys and shall not be
responsible for any willful misconduct or negligence on the part of any agent or
attorney appointed by it with due care hereunder.
-8-
3.3. The Auction Agent's Disclaimer. The Auction Agent makes no
representation as to the correctness of the recitals in this Broker-Dealer
Agreement, the Auction Agent Agreement or the validity or adequacy of the Series
1995-2 Notes.
Section 4. Miscellaneous.
4.1. Termination. Any party may terminate this Broker-Dealer Agreement at
any time upon five days' prior notice to the other party; provided, however,
that if the Broker-Dealer is Xxxxx Xxxxxx Inc., neither the Broker-Dealer nor
the Auction Agent may terminate this Broker-Dealer Agreement without first
obtaining the prior written consent of the Trustee and the Corporation of such
termination, which consent shall not be unreasonably withheld or delayed. For so
long as the Auction Agent Agreement is effective and if Xxxxx Xxxxxx Inc. is the
sole Broker-Dealer, any termination of this Broker-Dealer Agreement shall not be
effective unless and until a successor, or substitute Broker-Dealer Agreement
becomes effective. This Broker-Dealer Agreement shall automatically terminate
upon the delivery of certificates representing the Taxable Auction Rate Series
1997-1 Notes pursuant to Section 17 of the First Supplemental Indenture or upon
termination of the Auction Agent Agreement.
4.2. Participant. The Broker-Dealer is, and shall remain for the term of
this Broker-Dealer Agreement, a member of, or Participant in, the Depository (or
an affiliate of such a member or Participant).
4.3. Communications. Except for (i) communications authorized to be made by
telephone pursuant to this Broker-Dealer Agreement or the Auction Procedures and
(ii) communications in connection with the Auctions (other than those expressly
required to be in writing), all notices, requests and other communications to
any party hereunder shall be in writing (including facsimile or similar writing)
and shall be given to such party, addressed to it, or its address or facsimile
number set forth below:
If to the Broker-Dealer,
addressed: XXXXX XXXXXX INC.
000 Xxxxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Public Finance Division
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
-9-
If to the Auction Agent,
addressed: BANKERS TRUST COMPANY
Corporate Trust and Agency Group
0 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Auction Rate Securities
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Trustee,
addressed: First Bank National Association
000 Xxxxx Xxxx Xxxxxx
Xxxxx Xxxxx, Xxxxx Xxxxxx 00000
Attention: Corporate Trust Department
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Corporation,
addressed: Education Loans Incorporated
000 Xxxxx Xxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxx Xxxxxx 00000
Attention: President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or such other address or facsimile number as such party may hereafter specify
for such purpose by notice to the other party. Each such notice, request or
communication shall be effective when delivered at the address specified herein.
Communications shall be given on behalf of the Broker-Dealer by a Broker-Dealer
Officer and on behalf of the Auction Agent by an Authorized Officer of the
Auction Agent. The Broker-Dealer may record telephone communications with the
Auction Agent.
4.4. Entire Agreement. This Broker-Dealer Agreement contains the entire
agreement between the parties relating to the subject matter hereof, and there
are not other representations, endorsements, promises, agreements or
understandings, oral, written or inferred, between the parties relating to the
subject matter hereof, except for the fee letter dated as of July 1, 1997, from
the Auction Agent to the Corporation.
4.5. Benefits. Nothing in this Broker-Dealer Agreement, express or implied,
shall give to any person, other than the Auction Agent, the Corporation, the
Broker-Dealer and their respective successors and assigns, any benefit of any
legal or equitable right, remedy or claim under this Broker-Dealer Agreement.
-10-
4.6. Amendment; Waiver.
(a) This Broker-Dealer Agreement shall not be deemed or construed to be
modified, amended, rescinded, canceled or waived, in whole or in part, except by
a written instrument signed by a duly authorized representative of the parties
hereto. This Broker-Dealer Agreement may not be amended without first obtaining
the prior written consent of the Corporation.
(b) Failure of either party to this Broker-Dealer Agreement to exercise
any right or remedy hereunder in the event of a breach of this Broker-Dealer
Agreement by the other party shall not constitute a waiver of any such right or
remedy with respect to any subsequent breach.
4.7. Successors and Assigns. This Broker-Dealer Agreement shall be binding
upon, inure to the benefit of, and be enforceable by, the parties hereto and
their respective successors and assigns.
4.8. Severability. If any clause, provision or section of this Broker-
Dealer Agreement shall be ruled invalid or unenforceable by any court of
competent jurisdiction, the invalidity or unenforceability of such clause,
provision or section shall not affect any remaining clause, provision or
sections hereof.
4.9. Execution in Counterparts. This Broker-Dealer Agreement may be
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.
4.10. Governing Law. This Broker-Dealer Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
-11-
In Witness Whereof, the parties hereto have caused this Broker-Dealer
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first above written.
BANKERS TRUST COMPANY
as Auction Agent
By:
----------------------------
Title:
----------------------
XXXXX XXXXXX INC.,
as Broker-Dealer
By:
----------------------------
Title:
----------------------
Pursuant to and in accordance with Section 9 of the First Supplemental Indenture
and Section 2.9 of the Auction Agent Agreement (defined above), the undersigned
consents to the execution of the above Broker-Dealer Agreement.
First Bank National Association, as Trustee
By:
-----------------------------------
Title:
--------------------------------
-12-
EXHIBIT A TO BROKER-DEALER AGREEMENT
SETTLEMENT PROCEDURES
If not otherwise defined herein, capitalized terms used herein shall have
the meanings given such terms in Article 1 of the First Supplemental Indenture.
These Settlement Procedures shall apply separately for each series of Taxable
Auction Rate Series 1997-1 Notes.
(a) Not later than (1) 3:00 P.M., if the Auction Rate Series 1997-1 Note
Interest Rate is the Auction Rate or (2) 4:00 p.m. if the Auction Rate Series
1997-1 Note Interest Rate is the Net Loan Rate, on each Auction Date, the
Auction Agent shall notify by telephone each Broker-Dealer that participated in
the Auction held on such Auction Date and submitted an Order on behalf of an
Existing Holder or Potential Holder of:
(i) the Auction Rate Series 1997-1 Note Interest Rate fixed for the
next Interest Period;
(ii) whether there were Sufficient Bids in such Auction;
(iii) if such Broker-Dealer submitted Bids or Sell Orders on behalf of
an Existing Holder (a "Seller's Broker-Dealer"), whether such Bid
or Sell Order was accepted or rejected, in whole or in part, and
the principal amount of Taxable Auction Rate Series 1997-1 Notes,
if any, to be sold by such Existing Holder;
(iv) if such Broker-Dealer submitted a Bid on behalf of a Potential
Holder (a "Buyer's Broker-Dealer"), whether such Bid was accepted
or rejected, in whole or in part, and the principal amount of
Taxable Auction Rate Series 1997-1 Notes, if any, to be purchased
by such Potential Holder;
(v) if the aggregate amount of Taxable Auction Rate Series
1997-1 Notes to be sold by all Existing Holders on whose behalf
such Seller's Broker-Dealer submitted Bids or Sell Orders exceeds
the aggregate principal amount of Taxable Auction Rate Series
1997-1 Notes to be purchased by all Potential Holders on whose
behalf such Broker-Dealer submitted a Bid, the name or names of
one or more Buyer's Broker-Dealers (and the name of the
Participant, if any, of each such Buyer's Broker-Dealer)
A-1
acting for one or more purchasers of such excess principal amount
of Taxable Auction Rate Series 1997-1 Notes and the principal
amount of Taxable Auction Rate Series 1997-1 Notes to be
purchased from one or more Existing Holders on whose behalf such
Seller's Broker-Dealer acted by one or more Potential Holders on
whose behalf each of such Buyer's Broker-Dealers acted;
(vi) if the principal amount of Taxable Auction Rate Series 1997-1
Notes to be purchased by all Potential Holders on whose behalf
such Buyer's Broker-Dealer submitted a Bid exceeds the amount of
Taxable Auction Rate Series 1997-1 Notes to be sold by all
Existing Holders on whose behalf such Broker-Dealer submitted a
Bid or a Sell Order, the name or names of one or more Seller's
Broker-Dealers (and the name of the Participant, if any, of each
such Seller's Broker-Dealer) acting for one or more sellers of
such excess principal amount of Taxable Auction Rate Series 1997-
1 Notes and the principal amount of Taxable Auction Rate Series
1997-1 Notes to be sold to one or more Potential Holders on whose
behalf such Buyer's Broker-Dealer acted by one or more Existing
Holders on whose behalf each of such Seller's Broker-Dealers
acted; and
(vii) the Auction Date for the next succeeding Auction.
(b) On each Auction Date, each Broker-Dealer that submitted an Order
on behalf of any Existing Holder or Potential Holder shall:
(i) advise each Existing Holder and Potential Holder on whose behalf
such Broker-Dealer submitted a Bid or Sell Order in the Auction
on such Auction Date whether such Bid or Sell Order was accepted
or rejected, in whole or in part;
(ii) in the case of a Broker-Dealer that is a Buyer's Broker-Dealer,
advise each Potential Holder on whose behalf such Buyer's Broker-
Dealer submitted a Bid that was accepted, in whole or in part, to
instruct such Potential Holder's Participant to pay such Buyer's
Broker-Dealer (or its Participant) through the Depository the
amount necessary to purchase
A-2
the principal amount of Taxable Auction Rate Series 1997-1 Notes
to be purchased pursuant to such Bid against receipt of such
Taxable Auction Rate Series 1997-1 Notes;
(iii) in the case of a Broker-Dealer that is a Seller's Broker-Dealer,
instruct each Existing Holder on whose behalf such Seller's
Broker-Dealer submitted a Sell Order that was accepted, in whole
or in part, to instruct such Existing Holder's Participant to
deliver to such Seller's Broker-Dealer (or its Participant)
through the Depository the principal amount of Taxable Auction
Rate Series 1997-1 Notes to be sold pursuant to such Order
against payment therefor;
(iv) advise each Existing Holder on whose behalf such Broker-Dealer
submitted an Order and each Potential Holder on whose behalf such
Broker-Dealer submitted a Bid of the Auction Rate Series 1997-1
Note Interest Rate for the next Taxable Auction Rate Series 1997-
1 Note Interest Period;
(v) advise each Existing Holder on whose behalf such Broker-Dealer
submitted an Order of the next Auction Date, including, without
limitation, Existing Holders deemed to have submitted Hold Orders
pursuant to Section 4(b)(iii) of the Second Supplemental
Indenture; and
(vi) advise each Potential Holder on whose behalf such Broker-Dealer
submitted a Bid that was accepted, in whole or in part, of the
next Auction Date.
(c) On the basis of the information provided to it pursuant to paragraph
(a) above, each Broker-Dealer that submitted a Bid or Sell Order in an Auction
is required to allocate any funds received by it in connection with such Auction
pursuant to paragraph (b) (ii) above, and any Taxable Auction Rate Series 1997-1
Notes received by it in connection with such Auction pursuant to paragraph (b)
(iii) above among the Potential Holders, if any, on whose behalf such Broker-
Dealer submitted Bids, the Existing Holders, if any, on whose behalf such
Broker-Dealer submitted Bids or Sell Orders in such Auction, and any Broker-
Dealers identified to it by the Auction Agent following such Auction pursuant to
paragraph (a) (v) or (a) (vi) above.
(d) On each Auction Date:
A-3
(i) each Potential Holder and Existing Holder with an Order in the
Auction on such Auction Date shall instruct its Participant as
provided in (b) (ii) or (b)(iii) above, as the case may be;
(ii) each Seller's Broker-Dealer that is not a Participant of the
Depository shall instruct its Participant to deliver such Taxable
Auction Rate Series 1997-1 Notes through the Depository to a
Buyer's Broker-Dealer (or its Participant) identified to such
Seller's Broker-Dealer pursuant to (a) (v) above against payment
therefor; and
(iii) each Buyer's Broker-Dealer that is not a Participant in the
Depository shall instruct its Participant to pay through the
Depository to a Seller's Broker-Dealer (or its Participant)
identified following such Auction pursuant to (a) (vi) above the
amount necessary to purchase the Taxable Auction Rate Series
1997-1 Notes to be purchased pursuant to (b) (ii) above against
receipt of such Taxable Auction Rate Series 1997-1 Notes.
(e) On the Business Day following each Auction Date:
(i) each Participant for a Bidder in the Auction on such Auction Date
referred to in (d) (i) above shall instruct the Depository to
execute the transactions described under (b) (ii) or (b) (iii)
above for such Auction, and the Depository shall execute such
transactions;
(ii) each Seller's Broker-Dealer or its Participant shall instruct the
Depository to execute the transactions described in (d)(ii) above
for such Auction, and the Depository shall execute such
transactions; and
(iii) each Buyer's Broker-Dealer or its Participant shall instruct the
Depository to execute the transactions described in (d) (iii)
above for such Auction, and the Depository shall execute such
transactions.
(f) If an Existing Holder selling Taxable Auction Rate Series 1997-1 Notes
in an Auction fails to deliver such Taxable Auction Rate Series 1997-1 Notes (by
authorized book-entry), a Broker-Dealer may deliver to the Potential Holder on
behalf of which it submitted a Bid that was accepted a principal amount of
A-4
Taxable Auction Rate Series 1997-1 Notes that is less than the principal amount
of Taxable Auction Rate Series 1997-1 Notes that otherwise was to be purchased
by such Potential Holder. In such event, the principal amount of Taxable
Auction Rate Series 1997-1 Notes to be so delivered shall be determined solely
by such Broker-Dealer, but only in Authorized Denominations. Delivery of such
lesser principal amount of Taxable Auction Rate Series 1997-1 Notes shall
constitute good delivery. Notwithstanding the foregoing terms of this paragraph
(f), any delivery or nondelivery of Taxable Auction Rate Series 1997-1 Notes
which shall represent any departure from the results of an Auction, as
determined by the Auction Agent, shall be of no effect unless and until the
Auction Agent shall have been notified of such delivery or nondelivery in
accordance with the provisions of the Auction Agent Agreement and the Broker-
Dealer Agreements. Neither the Trustee nor the Auction Agent will have any
responsibility or liability with respect to the failure of a Potential Holder,
Existing Holder or their respective Broker-Dealer or Participant to deliver the
principal amount of Taxable Auction Rate Series 1997-1 Notes or to pay for the
Taxable Auction Rate Series 1997-1 Notes purchased or sold pursuant to an
Auction or otherwise.
A-5
EXHIBIT B TO BROKER-DEALER AGREEMENT
------------------------------------
EDUCATION LOANS INCORPORATED
TAXABLE AUCTION RATE STUDENT LOAN ASSET-BACKED NOTES
SENIOR SERIES [1997-1G] [1997-1H]
ORDER FORM
----------
AUCTION DATE _________
ISSUE ________________
SERIES _______________
The undersigned Broker-Dealer submits the following orders on behalf of the
Bidder(s) indicated below:
BIDS BY EXISTING HOLDERS
------------------------
PRINCIPAL AMOUNT
OF NOTES ($100,000
EXISTING HOLDER OR MULTIPLES) BID RATE
--------------- ------------------ --------
1. ________________ __________________ _______
2. ________________ __________________ _______
3. ________________ __________________ _______
4. ________________ __________________ _______
5. ________________ __________________ _______
6. ________________ __________________ _______
7. ________________ __________________ _______
8. ________________ __________________ _______
9. ________________ __________________ _______
10. ________________ __________________ _______
*Existing Holders may be described by name or other reference as determined in
the sole discretion of the Broker-Dealer.
B-1
EDUCATION LOANS INCORPORATED
TAXABLE AUCTION RATE STUDENT LOAN ASSET-BACKED NOTES
SENIOR SERIES [1997-1G] [1997-1H]
BIDS BY POTENTIAL HOLDERS
-------------------------
PRINCIPAL AMOUNT
OF NOTES ($100,000
POTENTIAL HOLDER OR MULTIPLES) BID RATE
---------------- ------------------ --------
1. _________________ __________________ _______
2. _________________ __________________ _______
3. _________________ __________________ _______
4. _________________ __________________ _______
5. _________________ __________________ _______
6. _________________ __________________ _______
7. _________________ __________________ _______
8. _________________ __________________ _______
9. _________________ __________________ _______
10. _________________ __________________ _______
11. _________________ __________________ _______
12. _________________ __________________ _______
13. _________________ __________________ _______
14. _________________ __________________ _______
15. _________________ __________________ _______
NOTES:
1. If one or more Orders covering in the aggregate more than the outstanding
principal amount of Taxable Auction Rate Series 1997-1 Notes held by any
Existing Holder are submitted, such Orders shall be considered valid in the
order of priority set forth in the Auction Procedures.
2. A Hold or Sell Order may be placed only by an Existing Holder covering a
principal account of Taxable Auction Rate Series 1997-1 Notes not greater
than the principal amount currently held by such Existing Holder.
B-2
3. Potential Holders may only make Bids, each of which must specify a rate.
If more than one Bid is submitted on behalf of any Potential Holder, each
Bid submitted shall be a separate Bid with the rate specified herein.
4. Bids may contain no more than three figures to the right of the decimal
point (.001 of 1%).
5. An order must be submitted in principal amounts of $100,000 or integral
multiples thereof.
*Potential Holders may be described by name or other reference as determined in
the sole discretion of the Broker-Dealer.
B-3
NAME OF BROKER-DEALER: _______________________________
AUTHORIZED SIGNATURE: ________________________________
TOTAL NUMBER OF ORDERS ON THIS ORDER FORM: ___________
Submit to: BANKERS TRUST COMPANY
Corporate Trust and Agency Group
0 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
B-4
EXHIBIT C TO BROKER-DEALER AGREEMENT
------------------------------------
EDUCATION LOANS INCORPORATED
TAXABLE AUCTION RATE STUDENT LOAN ASSET-BACKED NOTES
SENIOR SERIES [1997-1G] [1997-1H]
(To be used only for transfers made other
than pursuant to an Auction)
We are (check one)
_________ the Existing Holder indicated below*; or
_________ the Broker-Dealer for such Existing Holder; or
_________ the Participant for such Existing Holder.
We hereby notify you that such Existing Holder has transferred $________ (must
be in units of $100,000) of Senior Series 1997--1[G][H] Notes to________________
______________________________
(Existing Holder)
_______________________________
(Name of Broker-Dealer)
_______________________________
(Name of Participant)
By:____________________________
Printed Name:__________________
Title:_________________________
*Existing Holders may be described by name or other reference as determined in
the sole discretion of the Broker-Dealer.
C-1
EXHIBIT D TO BROKER-DEALER AGREEMENT
------------------------------------
EDUCATION LOANS INCORPORATED
TAXABLE AUCTION RATE STUDENT LOAN ASSET-BACKED NOTES
SENIOR SERIES [1997-1G] [1997-1H]
NOTICE OF A FAIL TO DELIVER OR MAKE PAYMENT
-------------------------------------------
COMPLETE EITHER I OR II.
------------------------
I. We are a Broker-Dealer for _____* (the "Purchaser"), which purchased
$_________ (must be in units of $100,000) of the Senior Series 1997-
1[G][H] Notes in the Auction held on ___________________ from the
seller of such Series 1997-1[G][H] Notes.
II. We are a Broker-Dealer for ______* (the "Seller"), which sold
$__________ (must be in units of $100,000) of the Senior Series 1997-
1[G][H] Notes in the Auction held on __________________ to the
purchaser of such Senior Series 1997-1[G][H] Notes.
We hereby notify you that (check one)
___________ the Seller failed to deliver such Senior Series 1997-1[G][H]
Notes to the Purchaser.
___________ the Purchaser failed to make payment to the Seller upon delivery
of such Series 1997-1[G][H] Notes.
_____________________________
(Name of Broker-Dealer)
By:__________________________
Name:________________________
Title:_______________________
*may be described by name or other reference as determined in the sole
discretion of the Broker-Dealer.
D-1
