Draft of 10/16/97
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EXHIBIT 4.4
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AUCTION AGENT AGREEMENT
(TAX EXEMPT AUCTION RATE SERIES 1997-1 NOTES)
by and among
EDUCATION LOANS INCORPORATED,
as Issuer,
FIRST BANK NATIONAL ASSOCIATION,
as Trustee,
and
BANKERS TRUST COMPANY,
as Auction Agent
________________________
Dated as of July 1, 1997
________________________
Relating to
$
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EDUCATION LOANS INCORPORATED
TAX EXEMPT AUCTION RATE STUDENT LOAN
ASSET-BACKED CALLABLE NOTES
SENIOR SERIES 1997-1A, B, C, D AND E
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TABLE OF CONTENTS
Page
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Section 1. Definitions and Rules of Construction......................... 2
1.1 Terms Defined by Reference to First Supplemental
Indenture................................................. 2
1.2 Terms Defined Herein.......................................... 2
1.3 Rules of Construction......................................... 4
Section 2. The Auction................................................... 4
2.1 Interest Rate on Tax Exempt Auction Rate Series 1997-1 Notes;
In corporation by Reference of Auction Procedures
and Settlement Procedures................................. 4
2.2 Preparation of Each Auction; Maintenance of
Existing Holder Registry.................................. 5
2.3 Maximum Auction Rates, All Hold Rates, After-Tax
Equivalents, "AA" Composite Commercial Paper Rates,
Indexes and Applicable Percentages........................ 8
2.4 Auction Schedule.............................................. 9
2.5 Changes in Auction Periods, Auction Date or Percentages
Used in Determining Maximum Auction Rate, All Hold
Rate and Non-Payment Rate................................. 10
2.6 Notice of Fee Rate Change..................................... 11
2.7 Notices to Existing Holders................................... 11
2.8 Payment Default............................................... 12
2.9 Broker-Dealers................................................ 12
2.10 Access to and Maintenance of Auction Records.................. 12
Section 3. Term of Agreement............................................. 13
Section 4. Trustee....................................................... 14
Section 5. Representations and Warranties of the Trustee................. 14
Section 6. The Auction Agent............................................. 15
6.1 Duties and Responsibilities................................... 15
6.2 Rights of the Auction Agent................................... 15
6.3 Auction Agent's Disclaimer.................................... 16
6.4 Compensation, Remedies and Indemnification.................... 16
6.5 Compensation of the Broker-Dealers............................ 17
Section 7. Miscellaneous................................................. 18
7.1 Governing Law................................................. 18
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7.2 Communications............................... 18
7.3 Entire Agreement............................. 20
7.4 Benefits..................................... 20
7.5 Amendment; Waiver............................ 20
7.6 Successor and Assigns........................ 20
7.7 Severability................................. 20
7.8 Execution in Counterparts.................... 21
Exhibits
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Exhibit A -- List of Initial Broker-Dealers
Exhibit B -- Broker-Dealer Agreement
Exhibit C -- Notice of Continuation of Percentage Used in
Determining Maximum Auction Rate, All Hold Rate or
Non-Payment Rate
Exhibit D -- Notice of Tax Exempt Auction Rate Series 1997-1 Notes
Outstanding
Exhibit E -- Notice of Fee Rate Change
Exhibit F -- Notice of a Payment Default
Exhibit G -- Settlement Procedures
Exhibit H -- Notice of Continuation of Auction Period
Exhibit I -- Notice of Auction Rate Series 1997-1 Note Interest Rate
Exhibit J -- Notice of Ratings
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THIS AUCTION AGENT AGREEMENT (TAX EXEMPT AUCTION RATE SERIES 1997-1
NOTES), dated as of July 1, 1997 (this "Auction Agent Agreement"), is being
entered into by and among EDUCATION LOANS INCORPORATED, a South Dakota
corporation (together with any successors or assigns, the "Issuer"), FIRST BANK
NATIONAL ASSOCIATION, Minneapolis, Minnesota, a national banking association
duly established and existing under the laws of the United States of America, as
Trustee (together with any successors or assigns, the "Trustee") under a certain
First Supplemental Indenture of Trust, as hereinafter defined and described, and
BANKERS TRUST COMPANY, a New York banking corporation (together with its
successors and assigns, the "Auction Agent"), acting not in its individual
capacity but solely as agent for the Issuer.
W I T N E S S E T H:
WHEREAS, the Issuer proposes to cause the Trustee to authenticate and
deliver $____________________ aggregate principal amount of its Student Loan
Asset-Backed Callable Notes, Series 1997-1, including therein five series
designated Tax Exempt Auction Rate Student Loan Asset-Backed Callable Notes,
Senior Series 1997-1A (the "Series 1997-1A Notes"), Tax Exempt Auction Rate
Student Loan Asset-Backed Callable Notes, Senior Series 1997-1B (the "Series
1997-1B Notes"), Tax Exempt Auction Rate Student Loan Asset-Backed Callable
Notes, Senior Series 1997-1C (the "Series 1997-1C Notes"), Tax Exempt Auction
Rate Student Loan Asset-Backed Callable Notes, Senior Series 1997-1D (the
"Series 1997-1D Notes") and Tax Exempt Auction Rate Student Loan Asset-Backed
Callable Notes, Senior Series 1997-1E (the "Series 1997-1E Notes" and, together
with the Series 1997-1A Notes, the Series 1997-1B Notes, the Series 1997-1C
Notes and the Series 1997-1D Notes, the "Tax Exempt Auction Rate Series 1997-1
Notes"). The Tax Exempt 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"), by and between the Issuer and the Trustee and executed
pursuant to an Indenture of Trust, dated as of July 1, 1997 (the "Original
Indenture"), by and between the Trustee and the Issuer ; and
WHEREAS, pursuant to Section 8 of the First Supplemental Indenture,
the Auction Agent has been appointed to act in the capacities set forth in this
Auction Agent Agreement; and
WHEREAS, the Trustee is entering into this Auction Agent Agreement at
the direction of the Issuer pursuant to the terms of the First Supplemental
Indenture;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the Issuer, the Trustee and the Auction Agent agree
as follows:
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Section 1. Definitions and Rules of Construction.
1.1 Terms Defined by Reference to 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 (as defined below), the following terms shall have the following
meanings, unless the context otherwise requires:
"Auction" shall have the meaning specified in Section 2.1 hereof.
"Auction Agent Fee" shall have meaning specified in Section 6.4(b)
hereof.
"Auction Agent Fee Rate" shall mean the rate per annum determined
pursuant to Section 6.4(b) hereof, as the same may be changed from time to time
in accordance with Section 6.4(b) hereof, at which the fee to be paid to the
Auction Agent for services rendered by it hereunder and under the Broker-Dealer
Agreements accrues pursuant to Section 6.4(b) hereof.
"Auction Procedures" shall mean the provisions that are set forth in
Sections 4 through 11, inclusive, of the First Supplemental Indenture.
"Authorized Auction Agent Officer" shall mean, with respect to the
Auction Agent, each Managing Director, Vice President, Assistant Vice President
and Assistant Treasurer of the Auction Agent 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 Auction
Agent Officer" for purposes hereof in a communication to the Trustee and the
Issuer.
"Authorized Issuer Officer" shall mean, with respect to the Issuer,
the Chairman of the Board of Directors, the President, any Vice President or the
Secretary of the Issuer or any other person designated in writing by the Board
of Directors of the Issuer to the Auction Agent from time to time, which writing
may limit the functions which such other person may undertake as an Authorized
Issuer Officer hereunder.
"Authorized Trustee Representative" shall mean each Vice President,
Assistant Vice President or Trust Officer in the Corporate Trust Department of
the Trustee and every other officer or employee of the Trustee designated as an
"Authorized Trustee Representative" for purposes hereof in a written
communication to the Auction Agent and the Issuer.
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"Broker-Dealer" shall mean a person listed on Exhibit A hereto, as
such Exhibit A may be amended from time to time.
"Broker-Dealer Agreement" shall mean each agreement between the
Auction Agent and a Broker-Dealer substantially in the form attached hereto as
Exhibit B.
"Broker-Dealer Fee" shall have the meaning specified in Section 6.5(a)
hereof.
"Broker-Dealer Fee Rate" shall have the meaning specified in Section
6.5(b) hereof.
"Business Day" shall mean a day of the year on which (i) banks located
in the city in which the Principal Office of the Trustee is located are not
required or authorized to remain closed, (ii) banks located in the city in which
the Principal Office of the Auction Agent, as set forth in Section 7.2 hereof,
is located are not required or authorized to remain closed, (iii) banks located
in the city in which the Principal Office of each Broker-Dealer, as set forth in
and for purposes of the applicable Broker-Dealer Agreement, is located are not
required or authorized to remain closed and (iv) The New York Stock Exchange is
not closed.
"Existing Holder Registry" shall mean the register maintained by the
Auction Agent pursuant to Section 2.2 hereof.
"Notice of Failure to Deliver or Make Payment" shall mean a notice
substantially in the form of Exhibit D to the Broker-Dealer Agreement.
"Notice of Fee Rate Change" shall mean a notice substantially in the
form of Exhibit E hereof.
"Notice of Payment Default" shall mean a notice substantially in the
form of Exhibit F hereto.
"Notice of Ratings" shall mean a notice substantially in the form of
Exhibit J hereto.
"Notice of Tax Exempt Auction Rate Series 1997-1 Notes Outstanding"
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 to the Broker-Dealer Agreement.
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"Participant" shall mean a member of, or participant in, the
Securities Depository.
"Settlement Procedures" shall mean the Settlement Procedures attached
as Exhibit G hereto.
1.3 Rules of Construction. Unless the context or use indicates
another or different meaning or intent, the following rules shall apply to the
construction of this Auction Agent Agreement:
(a) Words importing the singular number shall include the plural
number and vice versa.
(b) The captions and headings herein are solely for convenience of
reference and shall not constitute a part of this Auction Agent 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 Auction Agent 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 Trustee, the Auction Agent and the
Issuer under this Auction Agent Agreement shall apply to the Series 1997-1A
Notes, the Series 1997-1B Notes, the Series 1997-1C Notes, the Series 1997-
1D Notes and the Series 1997-1E Notes, but separately in each case.
References to "Tax Exempt Auction Rate Series 1997-1 Notes" shall, unless
the context clearly contemplates a reference to all the Tax Exempt Auction
Rate Series 1997-1 Notes, be deemed to refer only to a particular series of
Tax Exempt Auction Rate Series 1997-1 Notes.
Section 2. The Auction.
2.1 Interest Rate on Tax Exempt Auction Rate Series 1997-1 Notes;
Incorporation by Reference of Auction Procedures and Settlement Procedures.
(a) During the Initial Interest Period, each of the Series 1997-1A
Notes, the Series 1997-1B Notes, the Series 1997-1C Notes, the Series 1997-
1D Notes and the Series 1997-1E Notes shall bear interest at the Tax Exempt
Auction Rate Series 1997-1 Note Initial Interest Rate for such series.
Thereafter, the Tax Exempt Auction Rate Series 1997-1 Notes shall bear
interest at the Auction Rate Series 1997-1 Note Interest Rate based on an
Interest Period that shall be an Auction Period. The Auction Rate Series
1997-1 Note Interest Rate
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on each series of the Tax Exempt Auction Rate Series 1997-1 Notes for each
Auction Period shall be the Auction Rate determined in accordance with
Sections 3 through 12 of the First Supplemental Indenture (not to exceed
14% per annum). Pursuant to Section 8 of the First Supplemental Indenture,
the Issuer has duly appointed Bankers Trust Company as Auction Agent for
purposes of the Auction Procedures and to perform such other obligations
and duties as are herein set forth. Bankers Trust Company hereby accepts
such appointment and agrees that, on each Auction Date, it shall follow the
procedures set forth in this Section 2 and the Auction Procedures for the
purpose of, among other things, determining the Auction Rate, and
ultimately the Auction Rate Series 1997-1 Note Interest Rate for each
series of the Tax Exempt Auction Rate Series 1997-1 Notes for each Auction
Period other than 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 hereof to the same extent as if
such provisions were fully set forth herein.
2.2 Preparation of Each Auction; Maintenance of Existing Holder
Registry.
(a) A list of Broker-Dealers (showing ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. as the sole
initial Broker-Dealer) is attached as Exhibit A to this Auction Agent
Agreement. Not later than seven days prior to any Auction Date for which
any change in such list of Broker-Dealers is to be effective, the Trustee,
at the direction of an Authorized Issuer Officer, will notify the Auction
Agent in writing of such change and, if any such change is the addition of
a Broker-Dealer to such list, shall cause to be delivered to the Auction
Agent for execution by the Auction Agent a Broker-Dealer Agreement manually
signed by such Broker-Dealer. The Auction Agent shall have entered into a
Broker-Dealer Agreement with each Broker-Dealer prior to the participation
of any such Broker-Dealer in any Auction.
(b) In the event that any day that is scheduled to be an Auction Date
shall be changed after the Auction Agent shall have given the notice of
such Auction Date pursuant to clause (vii) of paragraph (a) of the
Settlement Procedures, the Auction Agent, by such means as the Auction
Agent deems practicable, shall give notice of such change to the Broker-
Dealers not later than the earlier of 9:15 a.m., New York City time, on the
new Auction Date and 9:15 a.m., New York City time, on the old Auction
Date.
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(c) (i) The Auction Agent shall maintain a current registry of Persons
that are Broker-Dealers, compiled initially on the Closing Date as
described below, and that hold Tax Exempt Auction Rate Series 1997-1
Notes, for purposes of dealing with the Auction Agent in connection
with an Auction (such registry being herein called the "Existing
Holder Registry"). Such Persons shall constitute the "Existing
Holders" for purposes of dealing with the Auction Agent in connection
with an Auction. The Auction Agent shall indicate in the Existing
Holder Registry for each Existing Holder the identity of the Broker-
Dealer which submitted the most recent Order in any Auction which
resulted in such Existing Holder continuing to hold or purchasing the
Tax Exempt Auction Rate Series 1997-1 Notes. Pursuant to the Broker-
Dealer Agreement, ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., as the sole initial Broker-
Dealer, has agreed to provide to the Auction Agent on the Closing Date
the names and addresses of the Persons who are to be initially listed
on the Existing Holder Registry as constituting the initial Existing
Holders of Tax Exempt Auction Rate Series 1997-1 Notes for purposes of
dealing with the Auction Agent in connection with an Auction. The
Auction Agent may rely upon, as evidence of the identities of the
Existing Holders, such list, the results of each Auction and notices
from any Existing Holder, Participant of any Existing Holder or
Broker-Dealer of any Existing Holder as described in Section
2.2(c)(iii) hereof.
(ii) The Trustee shall notify the Auction Agent when any notice
of redemption of Tax Exempt Auction Rate Series 1997-1 Notes is sent
to the Securities Depository as the Holder of Tax Exempt Auction Rate
Series 1997-1 Notes not later than 11:00 a.m., New York City time, on
the date such notice is sent. Such notice with respect to a redemption
shall be substantially in the form of Exhibit D hereto, Notice of Tax
Exempt Auction Rate Series 1997-1 Notes Outstanding. In the event the
Auction Agent receives from the Trustee written notice of any partial
redemption of any Tax Exempt Auction Rate Series 1997-1 Notes, the
Auction Agent shall, at least two Business Days prior to the next
Auction, request each Participant to disclose to the Auction Agent
(upon selection by such Participant of the Existing Holders whose Tax
Exempt Auction Rate Series 1997-1 Notes are to be redeemed) the
aggregate principal amount of such Tax Exempt Auction Rate Series
1997-1 Notes of each such Existing Holder, if any, which are to be
redeemed; provided the Auction Agent has been furnished with the name
and telephone number of a person or department at such Participant
from which it is to request such information. In the absence of
receiving any such information with respect to any Existing Holder,
from such Existing Holder's Participant or otherwise, the Auction
Agent may continue to treat such Existing Holder as the
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beneficial owner of the principal amount of Tax Exempt Auction Rate
Series 1997-1 Notes shown in the Existing Holder Registry.
(iii) The Auction Agent shall be required to register in the
Existing Holder Registry a transfer of Tax Exempt Auction Rate Series
1997-1 Notes from an Existing Holder to another Person only if such
transfer is made to a Person through a Broker-Dealer and if (A) such
transfer is pursuant to an Auction or (B) the Auction Agent has been
notified in writing (1) in a notice substantially in the form of a
Notice of Transfer by such Existing Holder, by the Participant of such
Existing Holder or by the Broker-Dealer of such Existing Holder of
such transfer, or (2) in a notice substantially in the form of a
Notice of Failure to Deliver or Make Payment by the Broker-Dealer of
any Person that purchased or sold Tax Exempt Auction Rate Series 1997-
1 Notes in an Auction of the failure of such Tax Exempt Auction Rate
Series 1997-1 Notes to be transferred as a result of the Auction. The
Auction Agent is not required to accept any Notice of Transfer or
Notice of Failure to Deliver or Make Payment delivered prior to an
Auction unless it is received by the Auction Agent by 3:00 p.m., New
York City time, on the Business Day next preceding the applicable
Auction Date.
(d) The Auction Agent may request that the Broker-Dealers, as set
forth in the Broker-Dealer Agreements, provide the Auction Agent with the
aggregate principal amount of Tax Exempt Auction Rate Series 1997-1 Notes
held by such Broker-Dealers for purposes of the Existing Holder Registry,
as well as with a list of their respective customers that such Broker-
Dealers believe are Existing Holders of the Tax Exempt Auction Rate Series
1997-1 Notes and the aggregate principal amount of Tax Exempt Auction Rate
Series 1997-1 Notes beneficially owned by each such customer. Except as
permitted by Section 2.10 hereof, the Auction Agent shall keep confidential
any such information and shall not disclose any such information so
provided to any person other than the relevant 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.
(e) The Auction Agent shall send by telecopy or other means a copy of
any Notice of Tax Exempt Auction Rate Series 1997-1 Notes Outstanding
received from the Trustee to each Broker-Dealer in accordance with Section
4.3 of the applicable Broker-Dealer Agreement.
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2.3 Maximum Auction Rates, All Hold Rates, After-Tax Equivalents,
"AA" Composite Commercial Paper Rates, Indexes and Applicable Percentages.
(a) On each Auction Date, the Auction Agent shall determine the
Maximum Auction Rate, the All Hold Rate, the After-Tax Equivalent, the "AA"
Composite Commercial Paper Rate, the Index (unless the Index is to be
determined by the Market Agent) and the Applicable Percentage. Not later
than 9:30 a.m., New York City time, on each Auction Date, the Auction Agent
shall notify the Trustee and the Broker-Dealers of the Maximum Auction
Rate, the All Hold Rate, the After-Tax Equivalent, the "AA" Composite
Commercial Paper Rate, the Index (unless the Index is to be determined by
the Market Agent) and the Applicable Percentage so determined. On or within
three Business Days after the Closing Date, the Issuer shall give written
notice to the Auction Agent of the initial ratings on the Tax Exempt
Auction Rate Series 1997-1 Notes by Moody's and Fitch substantially in the
form of the Notice of Ratings. Thereafter, if there is a change in one of
both of such ratings, the Issuer shall give written notice to the Auction
Agent substantially in the form of the Notice of Ratings within three
Business Days of its receipt of notice of such change, but not later than
the close of business on the Business Day immediately preceding an Auction
Date if the Issuer has received written notice of such change in a rating
or ratings prior to 12:00 noon, New York City time, on such Business Day,
and the Auction Agent shall take into account such change in rating or
ratings for purposes hereof and any Auction so long as such Notice of
Ratings is received by the Auction Agent no later than the close of
business on such Business Day.
(b) (i) If, on any Auction Date for an Auction Period, an Auction is
not held for any reason, then the Auction Rate Series 1997-1 Note
Interest Rate for the next succeeding Auction Period shall be the
Maximum Auction Rate.
(ii) If the ownership of the Tax Exempt Auction Rate Series
1997-1 Notes is no longer maintained in Book-Entry Form by the
Securities Depository, no further Auctions shall be held and the
Auction Rate Series 1997-1 Note Interest Rate for each Interest Period
commencing after the delivery of certificated Tax Exempt Auction Rate
Series 1997-1 Notes pursuant to Section 17 of the First Supplemental
Indenture shall equal the Maximum Auction Rate as determined by the
Trustee on the Business Day immediately preceding the first day of
such subsequent Interest Period as provided in Section 3(A) of the
First Supplemental Indenture.
(iii) If a Payment Default shall have occurred with respect to a
series of Tax Exempt Auction Rate Series 1997-1 Notes, the Auction
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Rate Series 1997-1 Note Interest Rate with respect to such series for
each Interest Period commencing on or immediately after the occurrence
of such Payment Default, and for each Interest Period thereafter, to
and including the Interest Period, if any, during which, or commencing
less than two Business Days after, such Payment Default is cured,
shall equal the Non-Payment Rate, as determined by the Trustee on the
first day of such Interest Period as provided in Section 3(A) of the
First Supplemental Indenture. The Auction Rate Series 1997-1 Note
Interest Rate for each Interest Period commencing at least two
Business Days after any cure of a Payment Default shall be determined
through implementation of the Auction Procedures.
2.4 Auction Schedule. The Auction Agent shall conduct Auctions on the
Auction Date 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 notice pursuant to Section 4.3 of the applicable Broker-Dealer
Agreement of any such change to each Broker-Dealer. Such notice shall be given
prior to 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 After-Tax Equivalent, the "AA"
Composite Commercial Paper Rate, the Index and the
Applicable Percentage to be used in determining the
Auction Rate under the Auction Procedures, the First
Supplemental Indenture and this Auction Agent
Agreement.
9:30 a.m. - 12:30 p.m. The Auction Agent assembles information communicated
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., New York City
time.
Not earlier than The Auction Agent makes the determination 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
principal amount of Tax Exempt Auction Rate Series
1997-1 Notes is allocated as provided in
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Section 4(d) of the
First Supplemental Indenture.
By approximately The Auction Agent advises the Trustee and
3:00 p.m./1/ or the Broker-Dealers of the results of the
4:00 p.m./2/ Auction as provided in Section 4(c)(ii) of
the First Supplemental Indenture.
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/1/ If the Auction Rate Series 1997-1 Note Interest Rate is the Auction
Rate.
/2/ If the Auction Rate Series 1997-1 Note Interest Rate is the Maximum
Auction Rate.
The Auction Agent shall follow the notification procedures set forth
in paragraph (a) of the Settlement Procedures.
2.5 Changes in Auction Periods, Auction Date or Percentages Used in
Determining Maximum Auction Rate, All Hold Rate and Non-Payment Rate.
(a) Changes in Auction Period or Periods.
(i) The Auction Agent shall mail any notice delivered to it
pursuant to the first paragraph of Section 10(a) of the First
Supplemental Indenture to the Existing Holders within two Business
Days of its receipt thereof.
(ii) The Auction Agent shall deliver any certificate delivered
to it pursuant to the third paragraph of Section 10(a) of the First
Supplemental Indenture to the Broker-Dealers not later than 3:00 p.m.,
New York City time, on the last Business Day preceding the next
Auction Date by telecopy or similar means.
(iii) If, after delivery to the Auction Agent of the notice
referred to in the first paragraph of Section 10(a) of the First
Supplemental Indenture, the Auction Agent fails to receive the
certificate referred to in the third paragraph of Section 10(a) of the
First Supplemental Indenture by 11:00 a.m., New York City time, on the
last Business Day preceding the next Auction Date, the Auction Agent
shall deliver a notice of such failure in substantially the form of
Exhibit H hereto to the Broker-Dealers not later than 3:00 p.m., New
York City time, on such Business Day by telecopy or other similar
means.
(iv) If, after delivery to the Auction Agent of the notice
referred to in the third paragraph of Section 10(a) and the
certificate referred to in the third paragraph of Section 10(a) of the
First Supplemental
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Indenture, Sufficient Bids are not received by the
Auction Agent by the Submission Deadline, the Auction Agent shall
notify the Broker-Dealers not later than 3:00 p.m., New York City
time, on such Auction Date by telephone confirmed in writing in
substantially the form of Exhibit I hereto the next Business Day.
(b) Changes in Auction Date. The Auction Agent shall mail any notice
delivered to it pursuant to Section 11 of the First Supplemental Indenture
to the Broker-Dealers within three Business Days of its receipt thereof.
(c) Changes in Percentages Used in Determining Maximum Auction Rate,
All Hold Rate and Non-Payment Rate.
(i) The Auction Agent shall mail any notice delivered to it
pursuant to the second paragraph of Section 10(b) of the First
Supplemental Indenture to the Existing Holders within two Business
Days of its receipt thereof.
(ii) The Auction Agent shall deliver any certificate delivered
to it pursuant to the third paragraph of Section 10(b) of the First
Supplemental Indenture to the Broker-Dealers not later than 3:00 p.m.,
New York City time, on the last Business Day preceding the next
Auction Date by telecopy or similar means.
(iii) If, after delivery to the Auction Agent of the notice
referred to in the second paragraph of Section 10(b) of the First
Supplemental Indenture, the Auction Agent fails to receive the
certificate referred to in the third paragraph of Section 10(b) of the
First Supplemental Indenture by 11:00 a.m., New York City time, on the
last Business Day preceding the next Auction Date, the Auction Agent
shall deliver a notice of such failure in substantially the form of
Exhibit C hereto to the Broker-Dealers not later than 3:00 p.m., New
York City time, on such Business Day by telecopy or other similar
means.
2.6 Notice of Fee Rate Change. If the Auction Agent Fee Rate is
changed pursuant to the provisions of Section 6.4(b) hereof or the Broker-Dealer
Fee Rate is changed pursuant to the provisions of 6.5(b) hereof, the Auction
Agent shall mail a Notice of Fee Rate Change (i) to the Trustee with respect to
a change in the Auction Agent Fee Rate and the Broker-Dealer Fee Rate and (ii)
to the Broker-Dealers with respect to a change in the Broker-Dealer Fee Rate, in
each case within two Business Days of such change.
2.7 Notices to Existing Holders. The Auction Agent shall be entitled
to rely upon the address of each Broker-Dealer as provided in Section 4.3 of the
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applicable Broker-Dealer Agreement in connection with any notice to each Broker-
Dealer, as an Existing Holder, required to be given by the Auction Agent.
2.8 Payment Default.
(a) After delivery by the Trustee to the Auction Agent of a notice
that a Payment Default shall have occurred, the Auction Agent shall, on the
Business Day following its receipt of the same, deliver a Notice of Payment
Default to the Broker-Dealers by telecopy or other similar means.
(b) The Auction Agent shall deliver a copy of any notice received by
it from the Trustee to the effect that a Payment Default has been cured to
the Broker-Dealers on the Business Day following its receipt of the same by
telecopy or other similar means.
2.9 Broker-Dealers.
(a) If the Auction Agent is provided with a copy of a Broker-Dealer
Agreement, which has been manually signed, with any person listed on
Exhibit A hereto to which the Trustee, at the direction of an Authorized
Issuer Officer, shall have consented, it shall enter into such Broker-
Dealer Agreement with such person. The Issuer hereby directs the Trustee
to consent to ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. as the sole initial Broker-Dealer.
(b) The Auction Agent may, at the written direction of an Authorized
Issuer Officer, and with the approval of ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., so long as
▇▇▇▇▇ ▇▇▇▇▇▇ Inc. is acting as a Broker-Dealer, enter into a Broker-Dealer
Agreement with any other person who requests to be selected to act as a
Broker-Dealer. The Auction Agent shall have entered into a Broker-Dealer
Agreement with each Broker-Dealer prior to the participation of any such
Broker-Dealer in any Auction.
(c) The Auction Agent shall terminate any Broker-Dealer Agreement as
set forth therein at the direction of an Authorized Issuer Officer.
2.10 Access to and Maintenance of Auction Records. The Auction Agent
shall afford to the Trustee, the Issuer and their respective agents, independent
public accountants and counsel access, at reasonable times during normal
business hours, to review and make extracts or copies (at no cost to the Auction
Agent) of all books, records, documents and other information concerning the
conduct and results of Auctions, provided that any such agent, accountant or
counsel shall furnish the Auction Agent with a letter from the Trustee or the
Issuer requesting that the Auction Agent afford such person access. The Auction
Agent shall maintain records relating to any Auction for a period of two years
after such
-12-
Auction (or for such longer period requested by the Trustee or the Issuer, not
to exceed four years after each Auction), and such records shall, in reasonable
detail, accurately and fairly reflect the actions taken by the Auction Agent
hereunder. At the end of such period, the Auction Agent shall deliver such
records to the Trustee. The Trustee and the Issuer agree to keep any
information regarding the conduct and results of the Auctions, including,
without limitation, information regarding customers of any Broker-Dealer,
received from the Auction Agent in connection with this Auction Agent Agreement
confidential and shall not disclose such information or permit the disclosure of
such information without the prior written consent of the applicable Broker-
Dealer to anyone except such agent, accountant or counsel engaged to audit or
review the results of Auctions as permitted by this Section 2.10. Any such
agent, accountant or counsel, before having access to such information, shall
agree to keep such information confidential and not to disclose such information
or permit disclosure of such information without the prior written consent of
the applicable Broker-Dealer, except as may otherwise be required by law.
Section 3. Term of Agreement.
(a) This Auction Agent Agreement shall terminate on the earlier to
occur of (i) the satisfaction and discharge of the First Supplemental
Indenture with respect to the Tax Exempt Auction Rate Series 1997-1 Notes
or this Auction Agent Agreement and (ii) the date on which this Auction
Agent Agreement is terminated in accordance with this Section 3. The
Trustee may terminate this Auction Agent Agreement in accordance with
Section 8(a) of the First Supplemental Indenture. The Auction Agent may
terminate this Auction Agent Agreement upon written notice to the Trustee,
the Issuer and the Market Agent on the date specified in such notice, which
date shall be no earlier than 90 days after the date of delivery of such
notice. Notwithstanding the foregoing, the provisions of Section 2 hereof
shall terminate upon the delivery of certificates representing Tax Exempt
Auction Rate Series 1997-1 Notes pursuant to Section 17 of the First
Supplemental Indenture. Notwithstanding the foregoing, the Auction Agent
may terminate this Agreement without further notice if, within 25 days
after notifying in writing the Trustee, the Issuer and the Market Agent
that it has not received payment of any Auction Agent Fee due it in
accordance with the terms hereof, the Auction Agent does not receive such
payment. Any resignation of the Auction Agent or termination of this
Auction Agent Agreement, other than as described in the preceding sentence
of this paragraph, shall not become effective until a successor Auction
Agent has been appointed and acceptance of such appointment by such
successor Auction Agent. The Issuer and the Trustee agree to diligently
proceed to appoint a successor Auction Agent. However, if a successor
Auction Agent shall not have been appointed within 60 days from the date of
such notice of resignation, the resigning Auction
-13-
Agent may petition any court of competent jurisdiction for the appointment
of a successor Auction Agent.
(b) Except as otherwise provided in this Section 3(b), the respective
rights and duties of the Trustee, the Issuer and the Auction Agent under
this Auction Agent Agreement shall cease upon termination of this Auction
Agent Agreement. The Trustee's representations and warranties to the
Auction Agent under Section 5 hereof, and the Issuer's obligations to the
Auction Agent under Section 6.4 hereof and to the Broker-Dealers under
Section 6.5 hereof, shall survive the termination of this Auction Agent
Agreement subject to Section 4 hereof. Upon termination of this Auction
Agent Agreement, the Auction Agent shall, upon request, promptly deliver to
the Trustee copies of all books and records maintained by it with respect
to Tax Exempt Auction Rate Series 1997-1 Notes in connection with its
duties hereunder.
Section 4. Trustee. All privileges, rights and immunities given to
the Trustee in the First Supplemental Indenture are hereby extended to and
applicable to the Trustee's obligations hereunder.
Section 5. Representations and Warranties of the Trustee.
The Trustee hereby represents and warrants to the Auction Agent and
the Issuer as follows:
5.1 The Trustee (i) has been duly incorporated and is validly
existing and in good standing as a national banking association under the laws
of the United States, and (ii) has all necessary authority, approvals, consents
(whether from the Issuer or otherwise) to enter into and perform its obligations
under this Auction Agent Agreement. This Auction Agent Agreement has been duly
and validly authorized, executed and delivered by the Trustee and constitutes
the legal, valid, binding and enforceable obligation of the Trustee.
5.2 Neither the execution, delivery and performance of this Auction
Agent Agreement, the consummation of the transactions contemplated hereby nor
the fulfillment of or compliance with the terms and conditions of this Auction
Agent Agreement will conflict with, violate or result in a breach of, the terms,
conditions or provisions of, or constitute a default under, any law or
regulation, any order or decree of any court or public authority having
jurisdiction over the Trustee, or any mortgage, indenture, contract, agreement
or undertaking to which the Trustee is a party or by which it is bound, or the
organizational documents pursuant to which the Trustee has been created and
under which it is operating.
-14-
5.3 All approvals, consents and orders of any governmental authority,
legislative body, board, agency or commission having jurisdiction over the
Trustee which would constitute a condition precedent to or the absence of which
would materially adversely affect the due performance by the Trustee of its
obligations under this Auction Agent Agreement have been obtained.
Section 6. The Auction Agent.
6.1 Duties and Responsibilities.
(a) The Auction Agent is acting solely as agent of the Issuer and
owes no fiduciary duties to any person (other than the Issuer) by reason of
this Auction Agent Agreement. The Auction Agent undertakes to perform such
duties and only such duties as are specifically set forth in this Auction
Agent Agreement, and no implied covenants or obligations shall be read into
this Auction Agent Agreement by means of the provisions of the First
Supplemental Indenture or otherwise against the Auction Agent.
(b) 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 Auction Agent 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 the pertinent facts.
(c) The Auction Agent shall not agree to any amendment to a Broker-
Dealer Agreement without the prior written consent of the Issuer, which
consent shall not be unreasonably withheld.
6.2 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 hereby and upon
any written instruction, notice, request, direction, consent, report,
certificate, form of bond certificate or other instrument, paper or
document believed by it to be genuine. The Auction Agent shall not be
liable for acting upon any telephone communication authorized hereby which
the Auction Agent believes in good faith to have been given by the Trustee
or by a Broker-Dealer. The Auction Agent may record telephone
communications with the Trustee or with Broker-Dealers or both.
(b) The Auction Agent may consult with counsel of its choice, and the
advice of such counsel shall be full and complete authorization and
-15-
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 misconduct or negligence on the part of any
agent or attorney appointed by it with due care hereunder.
6.3 Auction Agent's Disclaimer. The Auction Agent makes no
representation as to the correctness of the recitals in this Auction Agent
Agreement or the Broker-Dealer Agreement or the validity or adequacy of the Tax
Exempt Auction Rate Series 1997-1 Notes.
6.4 Compensation, Remedies and Indemnification.
(a) With respect to each series of Tax Exempt Auction Rate Series
1997-1 Notes, not later than 12:00 noon, New York City time, on the first
Interest Payment Date relating to such series, the Issuer, pursuant to
Section 5(b) of the First Supplemental Indenture, shall pay in arrears to
the Auction Agent, solely from moneys available therefor in the
Administration Fund, an amount in cash equal to the product of (i) the
Auction Agent Fee Rate times (ii) a fraction, the numerator of which is the
number of days from the Closing Date to such Interest Payment Date (or, if
such series of Tax Exempt Auction Rate Series 1997-1 Notes ceased to be
outstanding prior to such Interest Payment Date, the date on which such
series ceased to be outstanding) and the denominator of which is 360, times
(iii) the aggregate principal amount of Tax Exempt Auction Rate Series
1997-1 Notes of such series on the date of original issuance of the Series
1997-1 Notes.
(b) With respect to each series of Tax Exempt Auction Rate Series
1997-1 Notes any of which were outstanding at any time during the related
period, not later than 12:00 noon, New York City time, on each Interest
Payment Date thereafter relating to such series, the Issuer, pursuant to
Section 5(b) of the First Supplemental Indenture, shall pay in arrears to
the Auction Agent, solely from moneys available therefor in the
Administration Fund, an amount in cash equal to the product of (i) the
Auction Agent Fee Rate times (ii) a fraction, the numerator of which is the
number of days from the preceding Interest Payment Date to the current
Interest Payment Date (or, if such series of Tax Exempt Auction Rate Series
1997-1 Notes ceased to be outstanding prior to such current Interest
Payment Date, the date on which such series ceased to be outstanding) and
the denominator of which is 360, times (iii) the average principal amount
of Tax Exempt Auction Rate Series 1997-1 Notes of such series outstanding
during the period between such preceding Interest Payment Date (or the
Closing Date, in the case of the first Interest Payment Date) and the
current Interest Payment Date (or, if such series of Tax Exempt Auction
Rate Series 1997-1 Notes ceased to be outstanding prior to such current
Interest Payment Date, the date on which
-16-
such series ceased to be outstanding) (together with the fee described in
Section 6.4(a), the "Auction Agent Fee"). The Auction Agent Fee Rate may be
adjusted from time to time with the approval of an Authorized Issuer
Officer upon a written request of the Auction Agent delivered to the
Trustee and the Issuer. The Initial Auction Agent Fee Rate shall be .025%.
Any change in the Auction Agent Fee Rate shall be effective on the Auction
Date next succeeding such change.
(c) The Issuer shall reimburse the Auction Agent, upon its request,
for all reasonable expenses, disbursements and advances, if any, incurred
or made by the Auction Agent in accordance with any provision of this
Auction Agent Agreement or the Broker-Dealer Agreements (including the
reasonable compensation, expenses and disbursements of its agents and
counsel) from amounts available therefor in the Administration Fund. The
Issuer shall indemnify and hold harmless the Auction Agent for and against
any loss, liability or expense incurred without negligence or bad faith on
the Auction Agent's part, arising out of or in connection with the
acceptance or administration of its agency under this Auction Agent
Agreement and the Broker-Dealer Agreements, including the reasonable costs
and expenses (including the reasonable fees and expenses of its counsel) of
defending itself against any such claim or liability in connection with its
exercise or performance of any of its duties hereunder and thereunder and
of enforcing this indemnification provision; provided that the Issuer shall
not indemnify the Auction Agent pursuant to this Section 6.4(c) for any
fees and expenses incurred by the Auction Agent in the normal course of
performing its duties hereunder and under the Broker-Dealer Agreements,
such fees and expenses being payable as provided in Section 6.4(a) and (b)
above.
6.5 Compensation of the Broker-Dealers.
(a) With respect to each series of Tax Exempt Auction Rate Series
1997-1 Notes, not later than 12:00 noon, New York City time, on each
Interest Payment Date relating to such series, the Issuer, pursuant to
Section 5(b) of the First Supplemental Indenture, shall pay to the Auction
Agent, solely from moneys available therefor in the Administration Fund, an
amount in cash equal to the product of (i) the Broker-Dealer Fee Rate times
(ii) a fraction, the numerator of which is the number of days from the
preceding Interest
-17-
Payment Date (or from the Closing Date, in the case of the first Interest
Payment Date) to the current Interest Payment Date (or, if such series of
Tax Exempt Auction Rate Series 1997-1 Notes ceased to be outstanding prior
to such current Interest Payment Date, the date on which such series ceased
to be outstanding) and the denominator of which is 360, times (iii) the
average principal amount of Tax Exempt Auction Rate Series 1997-1 Notes of
such series outstanding during the period between such preceding Interest
Payment Date (or the Closing Date, in the case of the first Interest
Payment Date) and the current Interest Payment Date (or, if such series of
Tax Exempt Auction Rate Series 1997-1 Notes ceased to be outstanding prior
to such current Interest Payment Date, the date on which such series ceased
to be outstanding) (the "Broker-Dealer Fee"). The Auction Agent shall
advise the Issuer of the amount referred to in the preceding sentence not
later than 4:00 p.m., New York City time, at least two Business Days
preceding such Interest Payment Date. The Auction Agent shall apply such
monies as set forth in Section 2.5 of the Broker-Dealer Agreements.
(b) After retaining an amount equal to the Auction Agent Fee as
provided in Section 6.4 above, the Auction Agent shall pay the Broker-
Dealer Fee as provided in Section 6.5(a) above solely out of amounts
received by the Auction Agent pursuant to Section 5(b) of the First
Supplemental Indenture. The Auction Agent shall advise the Issuer at least
annually, at the request of an Authorized Issuer Officer, of the prevailing
rate. The Broker-Dealer Fee Rate may be adjusted from time to time with
the approval of an Authorized Issuer Officer upon a written request of the
Auction Agent or ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., as the initial Broker-Dealer, delivered
to the Trustee and the Issuer. The initial Broker-Dealer Fee Rate shall be
.25% per annum. If the Broker-Dealer Fee Rate is changed pursuant to the
terms hereof, the Trustee shall notify the Auction Agent thereof. Any
changes in the Broker-Dealer Fee Rate shall be effective on the Auction
Date next succeeding such change.
Section 7. Miscellaneous.
7.1 Governing Law. This Auction Agent Agreement shall be governed
by and construed in accordance with the laws of the State of New York applicable
to agreements made and to be performed in such state, it being understood that
the corporate powers and legal capacity of the Issuer shall be construed and
interpreted in accordance with the laws of the State of South Dakota.
7.2 Communications. Except for (i) communications authorized to be
made by telephone pursuant to this Auction Agent Agreement or the Auction
Procedures and (ii) communications in connection with 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)
-18-
and shall be given to such party addressed to it at its address, or facsimile
number set below:
If to the Trustee,
addressed: First Bank National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Trust Department
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Issuer,
addressed: Education Loans Incorporated
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Auction Agent,
addressed: Bankers Trust Company
Corporate Trust and Agency Group
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Auction Rate Securities
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Market Agent,
addressed: ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Public Finance
Division
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address, telephone or facsimile number as such party may hereafter
specify for such purpose by notice in writing to the other parties. Each such
notice, request or communication shall be effective when delivered at the
address specified herein. Communications shall be given on behalf of the
Trustee by an Authorized Trustee Representative, on behalf of the Auction Agent
by an Authorized Auction Agent Officer and on behalf of the Issuer by an
Authorized Issuer Officer.
-19-
7.3 Entire Agreement. This Auction Agent Agreement contains the
entire agreement between the parties relating to the subject matter hereof, and
there are no other representations, endorsements, promises, agreements or
understandings, oral, written or inferred, between the parties relating to the
subject matter hereof.
7.4 Benefits. Nothing herein, express or implied, shall give to any
person, other than the Trustee, acting on behalf of the beneficial owners of the
Tax Exempt Auction Rate Series 1997-1 Notes, the Auction Agent, the Issuer and
their respective successors and assigns, any benefit of any legal or equitable
right, remedy or claim hereunder.
7.5 Amendment; Waiver.
(a) This Auction Agent 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 duly authorized representatives of
the parties hereto.
(b) The Trustee and the Issuer shall not enter into or approve any
amendment of or supplement to the First Supplemental Indenture which
materially affects the Auction Agent's duties or obligations under the
First Supplemental Indenture without obtaining the prior written consent of
the Auction Agent. The Trustee shall promptly notify the Auction Agent of
any amendment of or supplement to the First Supplemental Indenture, and
shall provide a copy thereof to the Auction Agent upon request.
(c) Failure of a party hereto to exercise any right or remedy
hereunder in the event of a breach hereof by any other party shall not
constitute a waiver of any such right or remedy with respect to any
subsequent breach.
7.6 Successors and Assigns. This Auction Agent Agreement shall be
binding upon, inure to the benefit of and be enforceable by the respective
successors and assigns of each of the Trustee, the Issuer (including, without
limitation, EdLinc upon the Section 150(d)(3) Transfer) and the Auction Agent.
Except as to the Section 150(d)(3) Transfer and the associated assignment of the
Issuer's rights hereunder to, and assumption of the Issuer's obligations
hereunder by, EdLinc (consent to which assignment and assumption by the Trustee
and Auction Agent are hereby acknowledged), this Auction Agent Agreement may not
be assigned by any party hereto absent the prior written consent of the other
parties hereto, which consents shall not be unreasonably withheld.
7.7 Severability. If any clause, provision or section hereof shall
be ruled invalid or unenforceable by any court of competent jurisdiction, the
invalidity
-20-
or unenforceability of such clause, provision or section shall not affect any of
the remaining clauses, provisions or sections hereof.
7.8 Execution in Counterparts. This Auction Agent 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.
-21-
IN WITNESS WHEREOF, the parties hereto have caused this Auction Agent
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the date first above written.
EDUCATION LOANS INCORPORATED,
as Issuer
By: _______________________
Title: President
FIRST BANK NATIONAL
ASSOCIATION, as Trustee
By: _______________________
Title: Trust Officer
BANKERS TRUST COMPANY, as
Auction Agent
By: _______________________
Title: _____________________
-22-
EXHIBIT A
TO AUCTION AGENT AGREEMENT
--------------------------
LIST OF INITIAL BROKER-DEALERS
------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
A-1
EXHIBIT B
TO AUCTION AGENT AGREEMENT
--------------------------
BROKER-DEALER AGREEMENT
-----------------------
B-1
EXHIBIT C
TO AUCTION AGENT AGREEMENT
--------------------------
NOTICE OF CONTINUATION OF PERCENTAGE USED IN DETERMINING
[MAXIMUM AUCTION RATE] [ALL HOLD RATE] [NON-PAYMENT RATE]
---------------------------------------------------------
EDUCATION LOANS INCORPORATED
TAX EXEMPT AUCTION RATE STUDENT LOAN
ASSET-BACKED CALLABLE NOTES
SENIOR SERIES 1997-1A[B][C][D][E]
NOTICE IS HEREBY GIVEN that a condition for the establishment of a
change in the percentage used in determining the [Maximum Auction Rate] [All
Hold Rate] [Non-Payment Rate] for the captioned Tax Exempt Auction Rate Series
1997-1 Notes has not been met. The existing such percentage will continue to be
used in all such determinations.
Terms used herein have the meanings set forth in the First
Supplemental Indenture relating to the above-referenced issue.
FIRST BANK NATIONAL
ASSOCIATION, as Trustee
By: _______________________
Title: ___________________
Date: ____________________
C-1
EXHIBIT D
TO AUCTION AGENT AGREEMENT
--------------------------
NOTICE OF TAX EXEMPT AUCTION RATE SERIES 1997-1 NOTES
OUTSTANDING
-----------
EDUCATION LOANS INCORPORATED
TAX EXEMPT AUCTION RATE STUDENT LOAN
ASSET-BACKED CALLABLE NOTES
SENIOR SERIES 1997-1A[B][C][D][E]
NOTICE IS HEREBY GIVEN that $________ aggregate principal amount of
Series 1997-1A[B][C][D][E] Notes were outstanding at the close of business on
the immediately preceding Regular Record Date. Such aggregate principal amount
of Series 1997-1A[B][C][D][E] Notes, less $_________ aggregate principal amount
of Series 1997-1A[B][C][D][E] Notes to be redeemed by the Issuer pursuant to the
First Supplemental Indenture, for a net aggregate principal amount of Series
1997-1A[B][C][D][E] Notes of $_______, will be available on the next Auction
scheduled to be held on _________________.
Terms used herein have the meanings set forth in the First
Supplemental Indenture relating to the above-referenced issue.
FIRST BANK NATIONAL
ASSOCIATION, as Trustee
By:
--------------------------------
Title:
--------------------------
Date:
--------------------------
D-1
EXHIBIT E
TO AUCTION AGENT AGREEMENT
--------------------------
NOTICE OF FEE RATE CHANGE
-------------------------
EDUCATION LOANS INCORPORATED
TAX EXEMPT AUCTION RATE STUDENT LOAN
ASSET-BACKED CALLABLE NOTES
SENIOR SERIES 1997-1A, B, C, D AND E
NOTICE IS HEREBY GIVEN that the [Auction Agent Fee Rate] [Broker-
Dealer Fee Rate] has been changed in accordance with Section [6.4(b)] [6.5(b)]
of the Auction Agent Agreement. The new [Auction Agent Fee Rate] [Broker-Dealer
Fee Rate] shall be ______% per annum.
Terms used herein have the meanings set forth in the First
Supplemental Indenture relating to the above-referenced issue.
BANKERS TRUST COMPANY, as
Auction Agent
By: ________________________
Title: ___________________
Date: ____________________
APPROVED:
EDUCATION LOANS INCORPORATED
By: ________________________
Title: ___________________
Date: ____________________
E-1
EXHIBIT F
TO AUCTION AGENT AGREEMENT
--------------------------
NOTICE OF A PAYMENT DEFAULT
---------------------------
EDUCATION LOANS INCORPORATED
TAX EXEMPT AUCTION RATE STUDENT LOAN
ASSET-BACKED CALLABLE NOTES
SENIOR SERIES 1997-1
NOTICE IS HEREBY GIVEN that a Payment Default has occurred and not
been cured with respect to the Series 1997-1_____ Notes. Determination of the
Auction Rate Series 1997-1 Note Interest Rate on the Tax Exempt Auction Rate
Series 1997-1 Notes pursuant to the Auction Procedures will be suspended. The
Auction Rate Series 1997-1 Note Interest Rate on each series of the Tax Exempt
Auction Rate Series 1997-1 Notes for each Auction Period commencing after the
date of Payment Default will equal the Non-Payment Rate (as to each such series
with respect to which a Payment Default exists) or the Maximum Auction Rate (as
to all other series), as the case may be, as it is determined by the Trustee on
the first day of such Auction Period.
Terms used herein have the meanings set forth in the First
Supplemental Indenture relating to the above-referenced issue.
BANKERS TRUST COMPANY, as
Auction Agent
By: ________________________
Title: ___________________
Date: ____________________
F-1
EXHIBIT G
TO AUCTION AGENT AGREEMENT
--------------------------
SETTLEMENT PROCEDURES
---------------------
If not otherwise defined below, capitalized terms used herein shall
have the meanings given such terms in the First Supplemental Indenture. These
Settlement Procedures apply separately to each series of Tax Exempt 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 Maximum Auction 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 (a "Seller's Broker-Dealer")
submitted Bids or Sell Orders on behalf of an Existing Holder, whether
such Bid or Sell Order was accepted or rejected, in whole or in part,
and the principal amount of Tax Exempt Auction Rate Series 1997-1
Notes, if any, to be sold by such Existing Holder;
(iv) if such Broker-Dealer (a "Buyer's Broker-Dealer") submitted
a Bid on behalf of a Potential Holder, whether such Bid was accepted
or rejected, in whole or in part, and the principal amount of Tax
Exempt Auction Rate Series 1997-1 Notes, if any, to be purchased by
such Potential Holder;
(v) If the aggregate amount of Tax Exempt 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 Tax Exempt Auction Rate Series 1997-1
Notes to be purchased by all Potential Holders on whose behalf such
Buyer's 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) acting for one or more purchasers
of
G-1
such excess principal amount of Tax Exempt Auction Rate Series 1997-1
Notes and the principal amount of Tax Exempt 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 Tax Exempt 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 Tax
Exempt Auction Rate Series 1997-1 Notes to be sold by all Existing
Holders on whose behalf such Seller's 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 Tax Exempt Auction Rate Series 1997-1 Notes and the
principal amount of Tax Exempt 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 Securities Depository
the amount necessary to purchase the principal amount of Tax Exempt
Auction Rate Series 1997-1 Notes to be purchased pursuant to such Bid
(which amount, unless the date of such purchase is an Interest Payment
Date, will include an amount equal to the interest accrued and unpaid
on such principal amount of Tax Exempt Auction Rate Series 1997-1
Notes) against receipt of such Tax Exempt Auction Rate Series 1997-1
Notes;
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(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, or a Bid 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 Securities Depository the
principal amount of Tax Exempt 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 for the next
Interest Period;
(v) advise each Existing Holder on whose behalf such Broker-
Dealer submitted an Order of the next Auction Date; 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
Tax Exempt 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:
(i) each Potential Holder and Existing Holder with an Order in
the Auction on such Auction Date shall instruct its Participant as
provided in paragraph (b)(ii) or (b)(iii) above, as the case may be;
(ii) each Seller's Broker-Dealer that is not a Participant of the
Securities Depository shall instruct its Participant to deliver such
Tax Exempt Auction Rate Series 1997-1 Notes through the Securities
Depository to a Buyer's Broker-Dealer (or its Participant) identified
to
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such Seller's Broker-Dealer pursuant to paragraph (a)(v) above against
payment therefor; and
(iii) each Buyer's Broker-Dealer that is not a Participant in the
Securities Depository shall instruct its Participant to pay through
the Securities Depository to Seller's Broker-Dealer (or its
Participant) identified following such Auction pursuant to (a)(vi)
above in the amount necessary to purchase Tax Exempt Auction Rate
Series 1997-1 Notes to be purchased pursuant to paragraph (b)(ii)
above against receipt of such Tax Exempt Auction Rate Series 1997-1
Notes.
(e) On the Business Date following each Auction Date:
(i) each Participant for a Bidder in the Auction on such Auction
Date referred to in paragraph (d)(i) above shall instruct the
Securities Depository to execute the transactions described under
paragraph (b)(ii) or (b)(iii) above for such Auction, and the
Securities Depository shall execute such transactions;
(ii) each Seller's Broker-Dealer or its Participant shall
instruct the Securities Depository to execute the transactions
described in paragraph (d)(ii) above for such Auction, and the
Securities Depository shall execute such transactions; and
(iii) each Buyer's Broker-Dealer or its Participant shall
instruct the Securities Depository to execute the transactions
described in paragraph (d)(iii) above for such Auction, and the
Securities Depository shall execute such transactions.
(f) If an Existing Holder selling Tax Exempt Auction Rate Series
1997-1 Notes in an Auction fails to deliver such Tax Exempt 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 Tax Exempt Auction Rate Series 1997-1 Notes
that is less than the principal amount of Tax Exempt Auction Rate Series
1997-1 Notes that otherwise was to be purchased by such Potential Holder.
In such event, the principal amount of Tax Exempt 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 Tax Exempt Auction Rate Series 1997-1 Notes shall constitute good
delivery. Notwithstanding the foregoing terms of this paragraph (f), any
delivery or nondelivery of Tax Exempt 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
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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 take delivery of
or deliver, as the case may be, the principal amount of Tax Exempt Auction
Rate Series 1997-1 Notes purchased or sold pursuant to an Auction or
otherwise.
G-5
EXHIBIT H
TO AUCTION AGENT AGREEMENT
--------------------------
NOTICE OF CONTINUATION OF AUCTION PERIOD
----------------------------------------
EDUCATION LOANS INCORPORATED
TAX EXEMPT AUCTION RATE STUDENT LOAN
ASSET-BACKED CALLABLE NOTES
SENIOR SERIES 1997-1A[B][C][D][E]
NOTICE IS HEREBY GIVEN that a condition for the establishment of a
change in the length of one or more Auction Periods for the captioned Tax Exempt
Auction Rate Series 1997-1 Notes has not been met. An Auction will therefor be
held on the next Auction Date (___________________) and the length of such
Auction Period shall remain an Auction Period of _______ days.
BANKERS TRUST COMPANY, as
Auction Agent
By: _______________________
Title: ___________________
Date: ____________________
H-1
EXHIBIT I
TO AUCTION AGENT AGREEMENT
--------------------------
NOTICE OF AUCTION RATE SERIES 1997-1 NOTE INTEREST RATE
-------------------------------------------------------
EDUCATION LOANS INCORPORATED
TAX EXEMPT AUCTION RATE STUDENT LOAN
ASSET-BACKED CALLABLE NOTES
SENIOR SERIES 1997-1A[B][C][D][E]
NOTICE IS HEREBY GIVEN that [the Corporation Certificate and the
Trustee written statements, if any,] [Sufficient Bids] necessary for the
establishment of a change in the length of one or more Auction Periods for the
captioned Tax Exempt Auction Rate Series 1997-1 Notes have not been provided.
The Auction Rate Series 1997-1 Note Interest Rate for the Auction Period
commencing on ______________ shall be the Maximum Auction Rate and such Auction
Period shall remain an Auction Period of _____ days.
BANKERS TRUST COMPANY, as
Auction Agent
By: ________________________
Title: ___________________
Date: ____________________
I-1
EXHIBIT J
TO AUCTION AGENT AGREEMENT
--------------------------
NOTICE OF RATINGS
-----------------
EDUCATION LOANS INCORPORATED
TAX EXEMPT AUCTION RATE STUDENT LOAN
ASSET-BACKED CALLABLE NOTES
SENIOR SERIES 1997-1A, B, C, D AND E
NOTICE IS HEREBY GIVEN to the Auction Agent by the Issuer pursuant to
Section 2.3(a) of the Auction Agent Agreement that:
1. as of the date of this notice the rating by Moody's on the
captioned Tax Exempt Auction Rate Series 1997-1 Notes is ______;
and
2. as of the date of this notice the rating by Fitch on the
captioned Tax Exempt Auction Rate Series 1997-1 Notes is _____.
The Auction Agent may rely on such ratings for all purposes of the
First Supplemental Indenture, including determination of the Maximum Auction
Rate, the All Hold Rate and the Non-Payment Rate thereunder, from the date
hereof until further notice from the undersigned Education Loans Incorporated.
EDUCATION LOANS INCORPORATED
By:
------------------------
Title:
-----------------
Date:
------------------
J-1