<PAGE>
As filed with the Securities and Exchange Commission on February 25, 1998
Registration No. 333-26679-01
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
Under
The Securities Act of 1933
____________________
EDUCATION LOANS INCORPORATED
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 91-1819974
(State or other jurisdiction (I.R.S Employer Identification No.)
of incorporation or organization)
6799
(Primary Standard Industrial Classification Code Number)
105 First Avenue Southwest
Aberdeen, South Dakota 57401
(605) 622-4400
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
A. Norgrin Sanderson
105 First Avenue Southwest
Aberdeen, South Dakota 57401
(605) 622-4400
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
COPIES TO:
Timothy S. Hearn, Esq. David M. Reicher, Esq.
Dorsey & Whitney LLP Foley & Lardner
Pillsbury Center South Firstar Center
220 South Sixth Street 777 East Wisconsin Avenue
Minneapolis, Minnesota Milwaukee, Wisconsin 53202-5367
(612) 340-7802 (414) 297-5763
---------------------
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act, check
the following box. / /
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act Registration Number of the earlier effective registration
statement for the same offering. / /..........
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
Registration Number of the earlier effective registration statement for the same
offering. / /..........
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
Registration Number of the earlier effective registration statement for the same
offering. /x/ 333-26679-01
If delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box. / /
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS--
EDUCATION LOANS INCORPORATED,
A Delaware corporation
ITEM 16. EXHIBITS.
1.1 Revised Form of Underwriting Agreement+
3.1b Restated Certificate of Incorporation of Education Loans Incorporated,
a Delaware corporation
3.2b Bylaws of Education Loans Incorporated, a Delaware corporation+
4.1 Revised Form of Indenture+
4.2 Revised Form of First Supplemental Indenture+
4.3 Revised Form of Auction Agent Agreement (Taxable Auction Rate Series
1997-1 Notes)+
4.4 Revised Form of Auction Agent Agreement (Tax Exempt Auction Rate
Series 1997-1 Notes)+
4.5 Revised Form of Broker-Dealer Agreement (Taxable Auction Rate Series
1997-Notes)+
4.6 Revised Form of Broker-Dealer Agreement (Tax Exempt Auction Rate
Series 1997-1 Notes)+
5.1 Opinion of Dorsey & Whitney LLP to legality+
8.1 Opinion of Dorsey & Whitney LLP as to tax matters+
10.1 Revised Form of Servicing Agreement+
10.2 Form of Student Loan Purchase Agreement (Taxable)*
10.3 Form of Student Loan Purchase Agreement (Tax Exempt)*
10.4 Guarantee Agreements with Education Assistance Corporation dated July
3, 1997 and September 12, 1997+
10.5 Guarantee Agreement with Pennsylvania Higher Education Assistance
Agency dated February 28, 1994+
10.6 Guarantee Agreement with United Student Aid Funds, Inc. dated July 11,
1997+
10.7 Guarantee Agreement with Student Loans of North Dakota dated July 8,
1997+
10.8 Guarantee Agreement with Northstar Guarantee, Inc. dated July 15,
1997+
10.9 Guarantee Agreement with Great Lakes Higher Education Corporation
dated July 15, 1997+
10.10 Guarantee Agreement with Educational Credit Management Corporation
(formerly known as Transitional Guaranty Agency, Inc.) dated December
15, 1994+
10.11 Guarantee Agreements with Iowa College Aid Commission dated July 15,
1997+
10.12 Guarantee Agreement with Missouri Coordinating Board for Higher
Education dated July 15, 1997+
10.13 Guarantee Agreement with Illinois Student Assistance Commission
dated July 7, 1997+
10.14 Guarantee Agreements with California Student Aid Commission dated
July 6 and July 10, 1997+
23.1 Consents of Dorsey & Whitney LLP (included in Exhibits 5.1 and 8.1)
23.2 Consent of Eide Helmeke PLLP+
24.1b Powers of Attorney+
25.1 Statement of Eligibility of Trustee (Form T-1)*
27.1 Financial Data Schedule+
99.1 Form of Opinion of Dorsey & Whitney LLP as to "true sale" matters+
99.2 Form of Opinion of Dorsey & Whitney LLP as to nonconsolidation+
99.3 Assignment and Assumption Agreement dated February 19, 1998 by and
among Education Loans Incorporated, a South Dakota nonprofit
corporation, Student Loan Finance Corporation, a South Dakota
corporation, and the Registrant
99.4 Contribution Agreement dated February 19, 1998 by and among Education
Loans Incorporated, a South Dakota not-for-profit corporation, Student
Loan Finance Corporation, a South Dakota corporation, and the
Registrant
______________
* Incorporated by reference to a similarly numbered exhibit filed by the
registrant's former co-registrant, Education Loans Incorporated, a South
Dakota nonprofit corporation, on this registration statement (SEC File
No. 333-26679).
+ Previously filed.
<PAGE>
EDUCATION LOANS INCORPORATED,
A Delaware corporation
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this amendment to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Aberdeen, State of South Dakota on
February 24, 1998
EDUCATION LOANS INCORPORATED
By: /s/ A. Norgrin Sanderson
-------------------------------
A. Norgrin Sanderson
President and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this amendment
has been signed by the following persons in the capacities and on the dates
indicated.
Signature Title Date
--------- ----- ----
/s/ A. Norgrin Sanderson President, Treasurer February 24, 1998
- - ---------------------------- and Chairman of the Board
A. Norgrin Sanderson (principal executive officer,
principal financial and
accounting officer)
* Director February 24, 1998
- - ----------------------------
V. G. Stoia
* Director February 24, 1998
- - ----------------------------
Manley B. Feinstein
* Director February 24, 1998
- - ----------------------------
Harvey C. Jewett
*By /s/ A. Norgrin Sanderson
-----------------------------
A. Norgrin Sanderson,
s attorney-in-fact
<PAGE>
EXHIBIT INDEX
Listing Exhibits filed by
EDUCATION LOANS INCORPORATED,
A Delaware corporation
NUMBER EXHIBIT
1.1 Revised Form of Underwriting Agreement+
3.1b Restated Certificate of Incorporation of Education Loans Incorporated, a
Delaware corporation
3.2b Bylaws of Education Loans Incorporated, a Delaware corporation+
4.1 Revised Form of Indenture+
4.2 Revised Form of First Supplemental Indenture+
4.3 Revised Form of Auction Agent Agreement (Taxable Auction Rate Series
1997-1 Notes)+
4.4 Revised Form of Auction Agent Agreement (Tax Exempt Auction Rate Series
1997-1 Notes)+
4.5 Revised Form of Broker-Dealer Agreement (Taxable Auction Rate Series
1997-1 Notes)+
4.6 Revised Form of Broker-Dealer Agreement (Tax Exempt Auction Rate Series
1997-1 Notes)+
5.1 Opinion of Dorsey & Whitney LLP to legality+
8.1 Opinion of Dorsey & Whitney LLP as to tax matters+
10.1 Revised Form of Servicing Agreement+
10.2 Form of Student Loan Purchase Agreement (Taxable)*
10.3 Form of Student Loan Purchase Agreement (Tax Exempt)*
10.4 Guarantee Agreements with Education Assistance Corporation dated July 3,
1997 and September 12, 1997+
10.5 Guarantee Agreement with Pennsylvania Higher Education Assistance
Agency dated February 28, 1994+
10.6 Guarantee Agreement with United Student Aid Funds, Inc. dated July 11,
1997+
10.7 Guarantee Agreement with Student Loans of North Dakota dated July 8,
1997+
10.8 Guarantee Agreement with Northstar Guarantee, Inc. dated July 15, 1997+
10.9 Guarantee Agreement with Great Lakes Higher Education Corporation dated
July 15, 1997+
10.10 Guarantee Agreement with Educational Credit Management Corporation
(formerly known as Transitional Guaranty Agency, Inc.) dated December 15,
1994+
10.11 Guarantee Agreements with Iowa College Aid Commission dated July 15,
1997+
10.12 Guarantee Agreement with Missouri Coordinating Board for Higher Education
dated July 15, 1997+
10.13 Guarantee Agreement with Illinois Student Assistance Commission dated
July 7, 1997+
10.14 Guarantee Agreements with California Student Aid Commission dated July 6
and July 10, 1997+
23.1 Consents of Dorsey & Whitney LLP (included in Exhibits 5.1 and 8.1)
23.2 Consent of Eide Helmeke PLLP+
24.1b Powers of Attorney+
25.1 Statement of Eligibility of Trustee (Form T-1)*
27.1 Financial Data Schedule+
99.1 Form of Opinion of Dorsey & Whitney LLP as to "true sale" matters+
99.2 Form of Opinion of Dorsey & Whitney LLP as to nonconsolidation+
99.3 Assignment and Assumption Agreement dated February 19, 1998 by and among
Education Loans Incorporated, a South Dakota nonprofit corporation,
Student Loan Finance Corporation, a South Dakota corporation, and the
Registrant
99.4 Contribution Agreement dated February 19, 1998 by and among Education
Loans Incorporated, a South Dakota not-for-profit corporation, Student
Loan Finance Corporation, a South Dakota corporation, and the Registrant
______________
* Incorporated by reference to a similarly numbered exhibit filed by the
registrant's former co-registrant, Education Loans Incorporated, a South
Dakota nonprofit corporation, on this registration statement (SEC File
No. 333-26679).
+ Previously filed.
<PAGE>
EXHIBIT 3.1b
RESTATED
CERTIFICATE OF INCORPORATION
OF
EDUCATION LOANS INCORPORATED
Pursuant to Section 245 of the Delaware General Corporation Law, Education
Loans Incorporated does hereby adopt the following Restated Certificate of
Incorporation (originally filed May 7, 1997):
Article I. Name. The name of the Corporation is Education Loans
Incorporated (the "Corporation").
Article II. Registered Office and Agent. The address of the Corporation's
registered office in the State of Delaware is 1209 Orange Street, Wilmington,
New Castle County, Delaware, and the name of its registered agent at such
address is The Corporation Trust Company.
Article III. Purpose. The nature of the business or purpose to be
conducted or promoted by the Corporation is to engage exclusively in the
following business and financial activities:
(a) to receive the assets and assume the liabilities transferred to
it under that certain Contribution Agreement by and among Education Loans
Incorporated, a South Dakota not-for-profit corporation, Student Loan
Finance Corporation, a South Dakota corporation, and the Corporation (the
"Initial Transaction");
(b) to originate or acquire loans for post-secondary education of
students, to the extent of funds available therefor from the proceeds of
the Securities (defined below) ("Student Loans");
(c) to enter into any agreement relating to any Student Loans that
provides for the acquisition, origination, administration, servicing and
collection of amounts due on such Student Loans, to the extent of funds
available therefor from the proceeds of the Securities (defined below);
(d) to issue any class of bonds, notes, asset-backed certificates or
other securities payable solely from Student Loans and other assets pledged
to the payment thereof (the "Securities"); and
(e) to engage in any lawful act or activity and to exercise any
powers permitted to corporations organized under the General Corporation
Law of the State of Delaware that are incidental to and necessary, suitable
or
<PAGE>
convenient for the accomplishment of the purposes specified in clauses (a)
through (d) above.
The Corporation may not, however, incur indebtedness, other than
indebtedness in connection with the Initial Transaction, unless the Corporation
has received confirmation from each nationally recognized statistical rating
organization that then maintains a rating on any of the Corporation's Securities
(including Securities the indebtedness on which has been assumed by the
Corporation in conjunction with the Initial Transaction) that the incurrence of
such indebtedness will not cause such rating organization to withdraw, qualify
or lower its rating of such Securities.
Article IV. Duration. The Corporation is to have perpetual existence.
Article V. Number of Shares. The aggregate number of shares of all
classes of capital stock that the Corporation shall have authority to issue is
one hundred (100) shares of Common Stock, par value of $0.01 per share.
Article VI. Incorporator. The name and mailing address of the
incorporator is as follows:
Name Mailing Address
---- ---------------
Timothy S. Hearn Dorsey & Whitney LLP
220 South Sixth Street
Minneapolis, MN 55402
Article VII. Number of Directors; Initial Directors. The number of
directors of the Corporation will not be less than two nor more than seven. The
exact number of directors is to be fixed in the Bylaws. The number of directors
constituting the initial Board of Directors is four, and the names and addresses
of the persons who are to serve as directors until the first annual meeting of
shareholders or until their respective successors are elected and qualified are:
Name Address
---- -------
A. Norgrin Sanderson 105 First Avenue Southeast
Aberdeen, SD 57401
V.G. Stoia 105 First Avenue Southeast
Aberdeen, SD 57401
Manley B. Feinstein 105 First Avenue Southeast
Aberdeen, SD 57401
2
<PAGE>
Harvey C. Jewett 105 First Avenue Southeast
Aberdeen, SD 57401
The list above setting forth the names and addresses of the initial directors of
the Corporation does not include additional persons who may otherwise be elected
and qualified to serve as directors in accordance with the Bylaws.
Article VIII. Independent Directors. Within forty-five (45) days after the
closing of the Corporation's first registered offering of securities and at all
times thereafter, at least two directors of the Corporation must be Independent
Directors and at least one member of each committee of the Board of Directors
must be an Independent Director. "Independent Director" means a director of the
Corporation who is not, and for at least five years prior to the time of his or
her initial appointment was not, (i) a director, officer or employee of, or
direct or indirect beneficial owner of voting securities of, any Affiliate of
the Corporation (provided that such person may be serving or have served as an
"independent director" (meeting a definition substantially similar to the
definition of "Independent Director" in this Article VIII) of another limited
purpose entity similar to the Corporation and under common control with the
Corporation), (ii) a customer, supplier or other person who derives any of its
purchases or revenues from its activities with the Corporation or any Affiliate
of the Corporation; (iii) a person controlling or under common control with any
such stockholder, customer, supplier or other person; or (iv) a member of the
immediate family of any such stockholder, director, officer, employee, customer,
supplier or other person. For the purposes of this Certificate of Incorporation,
an "Affiliate" of a person or an entity is a person or an entity controlling,
controlled by, or under common control with such first person or entity and the
term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of management, policies or activities of a person
or entity, whether through ownership of voting securities, by contract or
otherwise.
Article IX. Directors' Powers. The Board of Directors shall have general
power and authority to manage the business, properties and affairs of the
Corporation, provided that, without the consent in writing of the Independent
Directors (as that term is defined in Article VIII of this Certificate of
Incorporation), the directors shall not have power (i) to make or to alter or
amend the Bylaws, (ii) to fix the amount to be reserved as working capital, or
(iii) to authorize or cause to be executed, mortgages or liens upon the property
and franchise of this Corporation except that such consent of the Independent
Directors shall not be required in connection with the Initial Transaction and
any actions incident thereto.
The Bylaws shall determine whether and to what extent the accounts and
books of this Corporation, or any of them, shall be open to the inspection of
the stockholders; and no stockholder shall have any right of inspecting any
account, or
3
<PAGE>
book, or document of this Corporation, except as conferred by law or the Bylaws
or by resolution of the stockholders.
The stockholders and directors shall have power to hold their meetings and
keep the books, documents and papers of the Corporation outside the State of
Delaware, at such places as may be from time to time designated by the Bylaws or
by resolution of the stockholders or directors, except as otherwise required by
the laws of Delaware.
Article X. Written Action by Directors. An action required or permitted
to be taken at a meeting of the Board of Directors of the Corporation may be
taken by written action signed, or counterparts of a written action signed in
the aggregate, by all of the directors.
Article XI. Reliance on Books and Records, Etc. A director shall, in the
performance of his duties, be fully protected in relying in good faith upon the
records of the Corporation and upon such information, opinions, reports or
statements presented to the Corporation by any of the Corporation's officers or
employees, or committees of the Board of Directors, or by any other person as to
matters the director reasonably believes are within such other person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Corporation.
Article XII. Liability of Directors. To the fullest extent permitted by
the General Corporation Law of the State of Delaware as the same exists or may
hereafter be amended, a director of the Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for a breach of fiduciary
duty as a director, except (i) for any breach of the director's duty of loyalty
to the Corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) under Section 174 of the Delaware General Corporation Law or (iv) for any
transaction from which the director derived an improper personal benefit. Any
repeal or modification of this Article XII shall not adversely affect any right
or protection of a director of the Corporation existing at the time of such
repeal or modification.
Article XIII. Internal Affairs. The Corporation:
(a) shall (i) maintain and prepare financial reports, financial
statements, books and records and bank accounts separate from those of its
Affiliates and any other person or entity and (ii) not permit any Affiliate
or any other person or entity independent access to its bank accounts;
4
<PAGE>
(b) shall not commingle its funds and other assets with those of any
Affiliate, any guarantor of any of the obligations of the Corporation
(each, a "Guarantor"), any Affiliate of any Guarantor or any other person
or entity;
(c) shall conduct its own business in its own name and shall hold all
of its assets in its own name;
(d) shall remain solvent and pay its debts and liabilities (including
employment and overhead expenses) from its assets as the same shall become
due;
(e) shall do all things necessary to observe corporate formalities and
preserve its existence as a single-purpose, bankruptcy-remote entity in
accordance with the standards of the Rating Agencies (as defined below)
providing ratings on any outstanding Securities, as such standards are in
effect on the date of issuance of such Securities;
(f) shall enter into transactions with Affiliates only if each such
transaction is commercially reasonable and on substantially similar terms
as a transaction that would be entered into on an arm's length basis with a
person or entity other than an Affiliate of the Corporation;
(g) shall have no employees who are not officers;
(h) shall compensate each of its consultants and agents from its own
funds for services provided to it and pay from its own assets all
obligations of any kind incurred;
(i) shall not guarantee, become obligated for, or hold itself or its
credit out to be responsible for, or available to satisfy, the debts or
obligations of any other person or entity or the decisions or actions
respecting the daily business or affairs of any other person or entity;
(j) shall not (i) acquire obligations or securities of any Affiliate
or any of the stockholders of the Corporation or (ii) buy or hold any
evidence of indebtedness issued by any other person or entity, other than
cash, investment-grade securities, Student Loans and other obligations and
securities specified in Article III hereof;
(k) will allocate fairly and reasonably and pay from its own funds the
cost of (i) any overhead expenses (including paying for any office space)
shared with any Affiliate of the Corporation and (ii) any services (such as
asset management, legal and accounting) that are provided jointly to the
Corporation and one or more of its Affiliates;
5
<PAGE>
(l) will maintain and utilize separate stationery, invoices and checks
bearing its own name and allocate separate office space (which may be a
separately identified area in office space shared with one or more
Affiliates of the Corporation) and maintain a separate sign in the office
directory of the building in which the Corporation maintains its principal
place of business;
(m) shall not make any loans or advances to, or pledge its assets for
the benefit of, any other person or entity, including, without limitation,
any Affiliate or Guarantor or any Affiliate of any Guarantor;
(n) shall be, and at all times shall hold itself out to the public
as, a legal entity separate and distinct from any other person or entity;
(o) shall, in the event that any authorized officer knows of any
misunderstanding regarding the separate identity of the Corporation,
correct such misunderstanding;
(p) shall not identify itself or any of its Affiliates as a division
or part of any other entity; and
(q) shall maintain adequate capital for the normal obligations
reasonably foreseeable in a business of its size and character and in light
of its contemplated business operations.
Article XIV. Meetings of Stockholders. Meetings of stockholders shall be
held at such place, within or without the State of Delaware, as may be
designated by or in the manner provided in the Bylaws or, if not so designated
or provided, at the registered office of the Corporation in the State of
Delaware. Elections of directors shall be by written ballot. The books of the
Corporation may be kept (subject to any provision contained in any applicable
statute) outside the State of Delaware at such place or places as may be
designated from time to time by the Board of Directors or in the Bylaws of the
Corporation.
Article XV. Limitations on Actions.
(a) Notwithstanding any other provision of this Certificate of
Incorporation, the Bylaws or any provision of law that otherwise so
empowers the Corporation, the Corporation shall not, without (i) the
affirmative vote of 100% of the members of the Board of Directors of the
Corporation, including the affirmative vote of the Independent Directors
required by Article VIII, and (ii) the affirmative vote of stockholders
holding at least two-thirds (2/3) of the total number of outstanding shares
of Common Stock of the Corporation, make an assignment for the benefit of
creditors, file a petition in bankruptcy, petition or apply to any tribunal
for the appointment
6
<PAGE>
of a custodian, receiver or any trustee for it or for a substantial part of
its property, commence any proceeding under any bankruptcy, reorganization,
arrangement, readjustment of debt, dissolution or liquidation law or
statute of any jurisdiction, whether now or hereinafter in effect, consent
or acquiesce in the filing of any such petition, application, proceeding or
appointment of or taking possession by the custodian, receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of the
Corporation or any substantial part of its property, or admit its inability
to pay its debts generally as they become due or authorize any of the
foregoing to be done or taken on behalf of the Corporation; provided, that
if there are not two Independent Directors required by Article VIII of this
Certificate of Incorporation then in office and acting, a vote upon any
matter set forth in this paragraph (a) of this Article XV shall not be
taken unless and until at least two Independent Directors meeting the
requirements of Article VIII of this Certificate of Incorporation have been
appointed and qualified.
(b) The Corporation shall not:
(i) engage in any business or activity other than as authorized
in Article III hereof,
(ii) dissolve or liquidate, in whole or in part,
(iii) consolidate with or merge into any other entity,
(iv) convey, transfer or lease its properties and assets
substantially as an entirety to any person or entity (except in
connection with the business and activities authorized in Article III
hereof),
(v) permit any entity to merge into it,
(vi) permit any person or entity to convey, transfer or lease its
properties and assets substantially as an entirety to the Corporation
(except in connection with the business and activities authorized in
Article III hereof),
(vii) incur any indebtedness (except in connection with the
business and activities authorized in Article III hereof),
(viii) take any action that might cause the Corporation to become
insolvent or
(ix) form, or cause to be formed, any subsidiaries of the
Corporation.
7
<PAGE>
(c) So long as any Securities remain outstanding, the Corporation
shall not amend or modify Article III, Article VIII, Article XIII or this
Article XV of this Certificate of Incorporation unless the Corporation
shall have first received written confirmation from each of the nationally-
recognized statistical ratings organizations that provide ratings on such
Securities on the date of issuance of such Securities (each, a "Rating
Agency") that such action, in and of itself, will not cause such Rating
Agency to qualify, downgrade or withdraw any of its then-current ratings on
any of such Securities.
(d) No transfer of any direct or indirect ownership interest in the
Corporation such that the transferee owns more than a 49% interest in the
Corporation (or such other interest specified by a Rating Agency with
respect to any outstanding Securities) may be made unless such transfer is
conditioned upon the delivery of an acceptable non-consolidation opinion to
any trustee with respect to any outstanding Securities and any Rating
Agency providing ratings on any outstanding Securities on the date of
issuance of such Securities concerning, as applicable, the Corporation, the
transferee and/or their respective owners.
Article XVI. Amendment, Alteration or Repeal. The Corporation reserves
the right to amend, alter, or repeal any other provision contained in this
Certificate of Incorporation in the manner now or hereafter prescribed by
statute, and all rights of stockholders herein are subject to this reservation;
provided, however, that Article III, Article VIII, Article XIII and Article XV
may be amended only in accordance with Article XV of this Certificate of
Incorporation.
Executed this 19th day of February, 1998.
/s/ A. Norgrin Sanderson
-------------------------------
A. Norgrin Sanderson
Chairman of the Board
8
<PAGE>
EXHIBIT 99.3
================================================================================
ASSIGNMENT AND ASSUMPTION AGREEMENT
BY AND AMONG
EDUCATION LOANS INCORPORATED,
A SOUTH DAKOTA NONPROFIT CORPORATION,
STUDENT LOAN FINANCE CORPORATION,
EDUCATION LOANS INCORPORATED,
A DELAWARE CORPORATION,
AND
FIRST BANK NATIONAL ASSOCIATION,
AS TRUSTEE,
_______________________________________
DATED AS OF FEBRUARY 19, 1998
_______________________________________
================================================================================
<PAGE>
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of February 19,
1998 (this "Agreement"), is being entered into by and among EDUCATION LOANS
INCORPORATED, a South Dakota nonprofit corporation (the "Original Issuer"),
STUDENT LOAN FINANCE CORPORATION, a South Dakota corporation and wholly owned
subsidiary of the Original Issuer ("SLFC"), EDUCATION LOANS INCORPORATED, a
Delaware corporation and wholly owned subsidiary of SLFC ("EdLinc"), and 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 (the "Trustee") under a certain Indenture of Trust, as
hereinafter described;
W I T N E S S E T H:
WHEREAS, the Original Issuer and the Trustee have entered into an
Indenture of Trust and a First Supplemental Indenture of Trust, each dated as of
February 1, 1998 (such Indenture of Trust, as heretofore and hereafter
supplemented and amended, including by such First Supplemental Indenture of
Trust, being herein referred to as the "Indenture); and
WHEREAS, pursuant to the Indenture, the Original Issuer has issued its
Student Loan Asset-Backed Callable Notes, Series 1998-1 (together with any
additional notes hereafter issued under the Indenture, the "Notes"), and has
undertaken obligations with respect to the Notes, the proceeds thereof, assets
acquired with such proceeds and certain other matters; and
WHEREAS, the Original Issuer has entered into two Auction Agent
Agreements, each dated as of February 1, 1998 (the "Auction Agent Agreements"),
with the Trustee and Bankers Trust Company (the "Auction Agent"), under which it
has undertaken obligations with respect to the Notes, the holding of auctions in
respect thereof and certain other matters; and
WHEREAS, the Original Issuer has entered into Student Loan Purchase
Agreements with various Lenders, under which it has undertaken obligations with
respect to the purchase of student loans thereunder and related matters; and
WHEREAS, pursuant to a Contribution Agreement, dated as of February
19, 1998 (the "Contribution Agreement"), among the Original Issuer, SLFC and
EdLinc, the Original Issuer has, in accordance with Section 150(d)(3) of the
Internal Code of 1986, as amended, agreed to transfer to SLFC, and SLFC has, in
turn, agreed to transfer to EdLinc, all of the Original Issuer's right, title
and interest in and to the Trust Estate under the Indenture, which includes the
Auction Agent Agreements and the Student Loan Purchase Agreements; and
-1-
<PAGE>
WHEREAS, in consideration for such transfers, SLFC and EdLinc have,
pursuant to the Contribution Agreement, each, in turn, agreed to assume all of
the Original Issuer's obligations under the Indenture, the Notes, the Auction
Agent Agreements and all Student Loan Purchase Agreements;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the Original Issuer, SLFC, EdLinc and the Trustee
agree as follows:
Section 1. Definitions. Capitalized terms used herein and not
otherwise defined herein shall have the meanings given such terms in the
Indenture.
Section 2. Assignment to SLFC. The Original Issuer hereby conveys,
transfers and assigns to SLFC all of its right, title and interest in and to the
Trust Estate under the Indenture, including, without limitation, the Auction
Agent Agreements and the Student Loan Purchase Agreements.
Section 3. Assumption of Obligations by SLFC. SLFC hereby agrees to be
bound, as successor by assignment to the Original Issuer, by all of the terms,
covenants and conditions of the Indenture, the Notes, each Auction Agent
Agreement and each Student Loan Purchase Agreement. SLFC hereby assumes, for the
benefit of the Original Issuer, the Trustee, each Noteholder and each other
party to or beneficiary of the Indenture, the Auction Agent Agreements and the
Student Loan Purchase Agreements, all of the obligations of the Original Issuer
under the Indenture, the Notes, each Auction Agent Agreement and each Student
Loan Purchase Agreement from and after the date of this Agreement.
Section 4. Release of Original Issuer. The Trustee hereby acknowledges
and agrees that, upon the assumption by SLFC under Section 2 hereof, SLFC has
become the successor to the Original Issuer as the Corporation under the
Indenture and the Notes for all intents and purposes, and the Original Issuer
has no further obligations or liabilities thereunder from and after the date of
this Agreement.
Section 5. Assignment to EdLinc. SLFC hereby conveys, transfers and
assigns to EdLinc all of its right, title and interest in and to the Trust
Estate under the Indenture, including, without limitation, the Auction Agent
Agreements and the Student Loan Purchase Agreements.
Section 6. Assumption of Obligations by EdLinc. EdLinc hereby agrees
to be bound, as successor by assignment to SLFC and the Original Issuer, by all
of the terms, covenants and conditions of the Indenture, the Notes, each Auction
Agent Agreement and each Student Loan Purchase Agreement. EdLinc hereby assumes,
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for the benefit of SLFC, the Trustee, each Noteholder and each other party to or
beneficiary of the Indenture, the Auction Agent Agreements and the Student Loan
Purchase Agreements, all of the obligations of SLFC and the Original Issuer
under the Indenture, the Notes, each Auction Agent Agreement and each Student
Loan Purchase Agreement from and after the date of this Agreement; provided that
such assumption shall not affect SLFC's obligations under the Servicing
Agreement, dated as of February 1, 1998 (the "Servicing Agreement"), among the
EdLinc, the Trustee and SLFC, as servicer, each of which will continue to be the
obligation solely of SLFC.
Section 7. Release of SLFC. The Trustee hereby acknowledges and agrees
that, upon the assumption by EdLinc under Section 4 hereof, EdLinc has become
the successor to SLFC and the Original Issuer as the Corporation under the
Indenture and the Notes for all intents and purposes, and neither the Original
Issuer nor SLFC has any further obligation or liability thereunder from and
after the date of this Agreement; provided that such release shall not release
SLFC from its obligations or liabilities under the Servicing Agreement.
Section 8. Performance of Original Issuer's Covenants under
Contribution Agreement. The Original Issuer hereby covenants and agrees with the
Trustee, for the benefit of the Holders of the Notes, that it will at all times
comply with Sections 9.04 through 9.07 of the Contribution Agreement.
Section 9. Performance of SLFC's Covenants under Contribution
Agreement. SLFC hereby covenants and agrees with the Trustee, for the benefit of
the Holders of the Notes, that it will at all times comply with Sections 10.02
through 10.04 of the Contribution Agreement.
Section 10. Performance of EdLinc's Covenants under Contribution
Agreement. EdLinc hereby covenants and agrees with the Trustee, for the benefit
of the Holders of the Notes, that it will at all times comply with Section 11.02
of the Contribution Agreement.
Section 11. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of South Dakota applicable to
agreements made and to be performed in such state, it being understood that the
corporate powers and legal capacity of EdLinc shall be construed and interpreted
in accordance with the laws of the State of Delaware.
Section 12. Benefits. Nothing herein, express or implied, shall give
to any person, other than the Trustee, each Noteholder and each other party to
or beneficiary of the Indenture, the Auction Agent Agreements and the Student
Loan Purchase Agreements, any benefit of any legal or equitable right, remedy or
claim hereunder.
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Section 13. Amendment; Waiver.
(a) This 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) 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.
Section 14. Successors and Assigns. This Agreement shall be binding
upon, inure to the benefit of and be enforceable by the respective successors
and assigns of each of the Original Issuer, SLFC, EdLinc and the Trustee. This
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.
Section 15. Severability. If any clause, provision or section hereof
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 of the remaining clauses, provisions or sections hereof.
Section 16. Execution in Counterparts. This 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the date first above written.
EDUCATION LOANS INCORPORATED,
a South Dakota nonprofit corporation
By: /s/ A. Norgrin Sanderson
------------------------------
Title: President
STUDENT LOAN FINANCE CORPORATION
By: /s/ A. Norgrin Sanderson
------------------------------
Title: President
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EDUCATION LOANS INCORPORATED,
a Delaware corporation
By: /s/ A. Norgrin Sanderson
------------------------------
Title: President
FIRST BANK NATIONAL ASSOCIATION,
as Trustee
By: /s/ Thomas Steele
----------------------------
Title: Trust Officer
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EXHIBIT 99.4
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CONTRIBUTION AGREEMENT
BY AND AMONG
EDUCATION LOANS INCORPORATED,
A SOUTH DAKOTA NOT-FOR-PROFIT CORPORATION,
STUDENT LOAN FINANCE CORPORATION
AND
EDUCATION LOANS INCORPORATED,
A DELAWARE CORPORATION
__________________________________________
FEBRUARY 19, 1998
__________________________________________
_______________________________________________________________________________
<PAGE>
TABLE OF CONTENTS
ARTICLE I
CONTRIBUTION OF ASSETS BY ORIGINAL ISSUER TO SLFC AND
ASSUMPTION OF LIABILITIES BY SLFC............................. 2
1.01 Contribution of Assets............................ 2
1.02 Liabilities Transferred........................... 2
ARTICLE II
CONTRIBUTION CONSIDERATION.................................... 2
2.01 Contribution Consideration........................ 2
ARTICLE III
CONTRIBUTION OF ASSETS BY SLFC TO EDLINC AND ASSUMPTION
OF SLFC LIABILITIES BY EDLINC................................. 2
3.01 Contribution of Assets............................ 2
3.02 Liabilities Transferred........................... 3
ARTICLE IV
CONTRIBUTION CONSIDERATION FOR EDLINC ASSETS ................. 3
4.01 Contribution Consideration........................ 3
ARTICLE V
CLOSING....................................................... 3
5.01 Closing........................................... 3
5.02 General Procedure................................. 3
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF ORIGINAL ISSUER............. 5
6.01 Incorporation and Corporate Power................. 5
6.02 Subsidiaries...................................... 5
6.03 Execution, Delivery; Valid and Binding Agreement.. 5
6.04 Authority; No Breach.............................. 5
6.05 SLFC Assets "AS IS, WHERE IS"..................... 6
6.06 Brokerage......................................... 7
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ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF SLFC........................ 7
7.01 Incorporation and Corporate Power.................. 7
7.02 Subsidiaries....................................... 7
7.03 Execution, Delivery; Valid and Binding Agreement... 7
7.04 Authority; No Breach............................... 7
7.05 EdLinc Assets "AS IS, WHERE IS".................... 8
7.06 Brokerage.......................................... 8
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES OF EDLINC...................... 8
8.01 Incorporation and Corporate Power.................. 8
8.03 Execution, Delivery; Valid and Binding Agreement... 8
8.04 Authority; No Breach............................... 9
ARTICLE IX
COVENANTS OF ORIGINAL ISSUER.................................. 9
9.01 Conduct of the Business............................ 9
9.02 Cooperation........................................ 9
9.03 Conditions......................................... 9
9.04 On-Going Covenants................................. 9
9.05 Nonpetition Covenant............................... 10
9.06 Valuation of SLFC Assets........................... 11
9.07 Transfer of SLFC Stock............................. 11
ARTICLE X
COVENANTS OF SLFC............................................. 11
10.01 Conditions......................................... 11
10.02 On-Going Covenants................................. 11
10.03 Nonpetition Covenant............................... 12
10.04 Transfer of EdLinc Stock........................... 12
ARTICLE XI
COVENANTS OF EDLINC........................................... 12
11.01 Conditions......................................... 12
11.02 On-Going Covenants................................. 12
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ARTICLE XII
CONDITIONS TO CLOSING......................................... 13
12.01 Conditions to SLFC's Obligations................... 13
12.02 Conditions to Original Issuer's Obligations........ 14
12.03 Conditions to EdLinc's Obligations................. 16
ARTICLE XIII
TERMINATION................................................... 17
13.01 Termination........................................ 17
13.02 Effect of Termination.............................. 17
ARTICLE XIV
SURVIVAL; INDEMNIFICATION..................................... 17
14.01 Survival........................................... 17
14.02 Indemnification of SLFC and EdLinc................. 17
14.03 Indemnification of Original Issuer................. 18
14.04 Legal Proceedings.................................. 18
ARTICLE XV
MISCELLANEOUS................................................. 18
15.01 Expenses........................................... 18
15.02 Further Assurances................................. 18
15.03 Amendment and Waiver............................... 19
15.04 Notices............................................ 19
15.05 Assignment......................................... 20
15.06 Severability....................................... 20
15.07 Complete Agreement................................. 21
15.08 Counterparts....................................... 21
15.09 Governing Law...................................... 21
SCHEDULE 1.01................................................. 22
SCHEDULE 1.02................................................. 23
EXHIBIT A..................................................... A-1
EXHIBIT B..................................................... B-1
EXHIBIT C..................................................... C-1
EXHIBIT D..................................................... D-1
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CONTRIBUTION AGREEMENT
----------------------
This CONTRIBUTION AGREEMENT (this "Agreement"), dated as of February 19,
1998, is made and entered into by and among EDUCATION LOANS INCORPORATED, a
South Dakota not-for-profit corporation (the "Original Issuer"), STUDENT LOAN
FINANCE CORPORATION, a South Dakota corporation ("SLFC") and a wholly-owned
subsidiary of the Original Issuer, and EDUCATION LOANS INCORPORATED, a Delaware
corporation ("EdLinc") and a wholly-owned subsidiary of SLFC.
WHEREAS, the Board of Directors of the Original Issuer has determined that
it is in the Original Issuer's best interests to transfer substantially all its
assets to a for-profit corporation that will assume substantially all its
liabilities or otherwise provide for their payment; and
WHEREAS, the Original Issuer has created a new South Dakota for-profit
corporation, SLFC, to which it can transfer substantially all of its assets in
exchange for senior stock of SLFC and the assumption by SLFC of substantially
all of its liabilities, in accordance with Section 150(d)(3) of the Internal
Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, the Original Issuer desires to contribute to SLFC, and SLFC
desires to accept from the Original Issuer, on the terms and subject to the
conditions set forth in this Agreement, all of the assets of the Original
Issuer, except such assets as are identified as Excluded Assets in Article I of
this Agreement; and
WHEREAS, SLFC has created a wholly-owned subsidiary and Delaware
bankruptcy-remote corporation, EdLinc, to hold assets contributed to it by SLFC;
and
WHEREAS, SLFC desires to contribute to EdLinc, and EdLinc desires to accept
from SLFC, on the terms and subject to the conditions set forth in this
Agreement, the assets of SLFC identified in Article III of this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties and agreements and the conditions set forth in this Agreement, the
Original Issuer, SLFC and EdLinc hereby agree as follows;
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ARTICLE I
CONTRIBUTION OF ASSETS BY ORIGINAL ISSUER TO SLFC AND
ASSUMPTION OF LIABILITIES BY SLFC
1.01 CONTRIBUTION OF ASSETS. On the terms and subject to the conditions
set forth in this Agreement, the Original Issuer shall, at the Closing (as
defined in Section 5.01 hereof), contribute to SLFC, and SLFC shall accept and
acquire from the Original Issuer, all of the Original Issuer's right, title and
interest, as of the Closing Date (as defined in Section 6.01 hereof), in and to
all of the assets of the Original Issuer, except the "Excluded Assets" as set
forth on Schedule 1.01 hereto (such assets, exclusive of the Excluded Assets,
being collectively referred to herein as the "SLFC Assets").
1.02 LIABILITIES TRANSFERRED. The Original Issuer shall transfer and SLFC
shall accept and assume all liabilities, obligations and undertakings of the
Original Issuer of any nature whatsoever, whether accrued, absolute, fixed or
contingent, known or unknown, due or to become due, unliquidated or otherwise,
except the "Excluded Liabilities" as set forth on Schedule 1.02 hereto (such
liabilities, obligations and undertakings, exclusive of the Excluded
Liabilities, being collectively referred to herein as the "SLFC Liabilities").
ARTICLE II
CONTRIBUTION CONSIDERATION FOR SLFC ASSETS
2.01 CONTRIBUTION CONSIDERATION. The contribution consideration to be
given by SLFC to the Original Issuer for the SLFC Assets shall be the ownership
by the Original Issuer on the Closing Date of 100 shares of Class A Common Stock
of SLFC (the "Class A Common Stock"), representing all of the outstanding
capital stock of SLFC, as well as the assumption of the SLFC Liabilities in
accordance with Section 1.02 hereof.
ARTICLE III
CONTRIBUTION OF ASSETS BY SLFC TO EDLINC AND ASSUMPTION OF SLFC
LIABILITIES BY EDLINC
3.01 CONTRIBUTION OF ASSETS. On the terms and subject to the conditions set
forth in this Agreement, SLFC shall, at the Closing, contribute to EdLinc, and
EdLinc shall accept and acquire from SLFC, all of SLFC's right, title and
interest, as of the Closing Date, in and to the Trust Estate established under
the Indenture of Trust, dated as of February 1, 1998 (the "Series 1998
Indenture"), between the Original
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Issuer and First Bank National Association, as trustee (the "Trustee")(the
"EdLinc Assets").
3.02 LIABILITIES TRANSFERRED. SLFC shall transfer and EdLinc shall accept
and assume all liabilities, obligations or undertakings of SLFC of any nature
whatsoever, whether accrued, absolute, fixed or contingent, known or unknown,
due or to become due, unliquidated or otherwise, under the Series 1998 Indenture
and all other agreements included in the EdLinc Assets (the "EdLinc
Liabilities"); provided that such acceptance and assumption shall not affect
SLFC's liabilities, obligations or undertakings under the Servicing Agreement,
dated as of February 1, 1998 (the "Servicing Agreement"), among EdLinc, the
Trustee and SLFC, as servicer, each of which will continue to be the liability,
obligation or undertaking solely of SLFC and do not constitute EdLinc
Liabilities.
ARTICLE IV
CONTRIBUTION CONSIDERATION FOR EDLINC ASSETS
4.01 CONTRIBUTION CONSIDERATION. The contribution consideration to be
given by EdLinc to SLFC for the EdLinc Assets shall be the ownership by SLFC on
the Closing Date of 100 shares of Common Stock of EdLinc (the "EdLinc Common
Stock"), representing all of the outstanding capital stock of EdLinc, as well as
the assumption of the EdLinc Liabilities in accordance with Section 3.02 hereof.
ARTICLE V
CLOSING
5.01 CLOSING. The closing of the transactions contemplated by this
Agreement (the "Closing") will take place at the offices of Dorsey & Whitney
LLP, 220 South Sixth Street, Minneapolis, Minnesota, at 9:00 a.m., Central
Standard Time, on the date of issuance and delivery of the initial series of
notes to be issued under the Series 1998 Indenture (the "Series 1998 Notes"), or
at such other place and on such other date as is mutually agreeable to the
Original Issuer, SLFC and EdLinc. The date on which the Closing occurs is
referred to herein as the "Closing Date," and the Closing shall be deemed
effective as of 9:00 a.m., Central Standard Time, on the Closing Date.
5.02 GENERAL PROCEDURE. At the Closing, each party shall deliver to the
party entitled to receipt thereof the documents required to be delivered
pursuant to Article XII hereof and such other documents, instruments and
materials (or complete and accurate copies thereof, where appropriate) as may be
reasonably required in order to effectuate the intent and provisions of this
Agreement, and all
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such documents, instruments and materials shall be satisfactory in form and
substance to counsel for the receiving party.
(a) The conveyance, transfer, assignment and delivery of the SLFC
Assets to SLFC shall be effected by the Original Issuer's execution and
delivery to SLFC of (i) as to that portion of the SLFC Assets consisting of
the EdLinc Assets, an Assignment and Assumption Agreement, substantially in
the form attached hereto as Exhibit A (the "Assignment and Assumption
Agreement"), among the Original Issuer, SLFC, EdLinc and the Trustee, (ii)
as to all of the Original Issuer's right title and interest, as of the
Closing Date, in and to the trust estate under the Indenture of Trust,
dated as of July 1, 1997 (the "Series 1997-A Indenture") between the
Original Issuer and the Trustee (the "Series 1997-A Assets"), an Assignment
and Assumption Agreement, substantially in the form attached hereto as
Exhibit B (the "Series 1997-A Assignment and Assumption Agreement") among
the Original Issuer, SLFC and the Trustee, and (iii) as to the remainder of
the SLFC Assets, a bill of sale substantially in the form attached hereto
as Exhibit C (the "SLFC Bill of Sale"), and such other instruments of
conveyance, transfer, assignment and delivery as SLFC shall reasonably
request to cause the Original Issuer to transfer, convey, assign and
deliver the SLFC Assets to SLFC.
(b) The conveyance, transfer, assignment and delivery of the EdLinc
Assets to EdLinc shall be effected by SLFC's execution and delivery to
EdLinc of the Assignment and Assumption Agreement and such other
instruments of conveyance, transfer, assignment and delivery as EdLinc
shall reasonably request to cause SLFC to transfer, convey, assign and
deliver the EdLinc Assets to EdLinc.
(c) The transfer by the Original Issuer and assumption by SLFC of the
SLFC Liabilities (other than that portion thereof consisting of (i) the
EdLinc Liabilities and (ii) the liabilities, obligations or undertakings of
the Original Issuer of any nature whatsoever, whether accrued, absolute,
fixed or contingent, known or unknown, due or to become due, unliquidated
or otherwise, under the Series 1997-A Indenture and all other agreement
included in the Series 1997-A Assets (the "Series 1997-A Liabilities"))
shall be evidenced by an assumption agreement substantially in the form
attached hereto as Exhibit D (the "SLFC Liabilities Assumption Agreement")
between the Original Issuer and SLFC.
(d) The transfer by the Original Issuer and assumption by SLFC, and
the transfer by SLFC and the assumption by EdLinc, of the EdLinc
Liabilities shall be evidenced by the Assignment and Assumption Agreement.
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(e) The transfer by the Original Issuer and assumption by SLFC of the
Series 1997-A Liabilities shall be evidenced by the Series 1997-A
Assignment and Assumption Agreement.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF ORIGINAL ISSUER
The Original Issuer hereby represents and warrants to SLFC and EdLinc that,
except as set forth in the Disclosure Schedule delivered by the Original Issuer
to SLFC on the date hereof (the "Disclosure Schedule") (which Disclosure
Schedule sets forth the exceptions to the representations and warranties
contained in this Article VI):
6.01 INCORPORATION AND CORPORATE POWER. The Original Issuer is a not-for-
profit corporation duly incorporated, validly existing and in good standing
under the laws of the State of South Dakota and has all requisite corporate
power and authority to enter into this Agreement and perform its obligations
hereunder.
6.02 SUBSIDIARIES. The SLFC Assets do not include any stock, partnership
interest, joint venture interest or any other equity or ownership interest
issued by any other corporation, organization or entity.
6.03 EXECUTION, DELIVERY; VALID AND BINDING AGREEMENT. The execution,
delivery and performance of this Agreement by the Original Issuer and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by all requisite corporate action, and no other proceedings on its
part are necessary to authorize the execution, delivery and performance of this
Agreement. This Agreement has been duly executed and delivered by the Original
Issuer and, assuming that this Agreement is the valid and binding agreement of
SLFC and EdLinc, constitutes the valid and binding obligation of the Original
Issuer, enforceable in accordance with its terms, except as such enforcement may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application affecting enforcement of creditors' rights or
by general principles of equity.
6.04 AUTHORITY; NO BREACH. The Original Issuer has the requisite corporate
power and authority to execute and deliver this Agreement and to perform its
obligations hereunder. The execution, delivery and performance of this
Agreement by the Original Issuer and the consummation of the transactions
contemplated hereby do not conflict with or result in any breach of any of the
provisions of, or constitute a default under, result in a violation of, result
in the creation of a right of termination or acceleration or any lien, security
interest, charge or encumbrance upon any assets of the Original Issuer, or
require any authorization, consent,
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approval, exemption or other action by or notice to any court or other
governmental body, under the provisions of the Articles of Incorporation or
Bylaws of the Original Issuer or under any indenture, mortgage, lease, loan
agreement or other agreement or instrument by which the Original Issuer or the
SLFC Assets are bound or affected (other than consents required under Section
12.01(c) hereof, which the Original Issuer undertakes to obtain prior to the
Closing Date), or any law, statute, rule or regulation or order, judgment or
decree to which the Original Issuer or the SLFC Assets are subject.
6.05 SLFC ASSETS "AS IS, WHERE IS". (a) Except as otherwise set forth in
clause (b) below, each of the SLFC Assets being transferred by the Original
Issuer to SLFC pursuant to this Agreement shall be transferred "AS IS" and
"WHERE IS" without any warranty whatsoever.
(b) Notwithstanding clause (a) above, the Original Issuer hereby represents
and warrants that:
(1) the Original Issuer's Plan has been duly adopted by the Original
Issuer and the Original Issuer's Plan and the Plan Approval are each
in full force and effect;
(2) the Original Issuer's Plan complies with the requirements of the
Higher Education Act of 1965, as amended, and the regulations
promulgated thereunder (the "Higher Education Act");
(3) the Original Issuer has complied with, and is now in compliance with,
each of the provisions of the Original Issuer's Plan; and
(4) no student loan included in the SLFC Assets is ineligible to have
special allowance payments paid with respect thereto because of any
failure of the Original Issuer's Plan to comply with the Higher
Education Act or any failure of the Original Issuer to comply with the
Original Issuer's Plan.
As used in this Agreement: "Original Issuer's Plan" means the Original Issuer's
Plan for Doing Business, dated February 6, 1981, as amended on September 16,
1983, November 18, 1983, April 22, 1985, January 12, 1987, July 26, 1988,
June 6, 1991, June 22, 1993, May 23, 1996 and February 1, 1998, as required by
Section 438 of the Higher Education Act (which term shall include the Original
Issuer's Justifications for the issuance of tax-exempt obligations submitted to
the Department of Education in connection with the Original Issuer's Series D
Student Loan Revenue Bonds and Series E Student Loan Revenue Bonds); and "Plan
Approval" means the approval of the Original Issuer's Plan by the Governor of
the State of South Dakota, dated
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February 11, 1998 (together with prior such approvals by the Governor of the
State of South Dakota and by the United States Secretary of Education).
(c) The Original Issuer's obligations under Section 14.02 shall apply to
the inaccuracy of any representation or warranty in clause (b) above.
6.06 BROKERAGE. Except for any fees payable in connection with the
valuation required under Section 9.06, all of which will be paid by the Original
Issuer, no third party shall be entitled to receive any brokerage commissions,
finder's fees, fees for financial advisory services or similar compensation in
connection with the transactions contemplated by this Agreement based on any
arrangement or agreement made by or on behalf of the Original Issuer.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF SLFC
SLFC hereby represents and warrants to the Original Issuer and EdLinc that:
7.01 INCORPORATION AND CORPORATE POWER. SLFC is a business corporation
duly incorporated, validly existing and in good standing under the laws of the
State of South Dakota, with the requisite corporate power and authority to enter
into this Agreement and perform its obligations hereunder.
7.02 SUBSIDIARIES. The EdLinc Assets do not include any stock, partnership
interest, joint venture interest or any other equity or ownership interest
issued by any other corporation, organization or entity.
7.03 EXECUTION, DELIVERY; VALID AND BINDING AGREEMENT. The execution,
delivery and performance of this Agreement by SLFC and the consummation of the
transactions contemplated hereby have been duly and validly authorized by all
requisite corporate action, and no other corporate proceedings on its part are
necessary to authorize the execution, delivery or performance of this Agreement.
This Agreement has been duly executed and delivered by SLFC and, assuming that
this Agreement is the valid and binding agreement of the Original Issuer and
EdLinc, constitutes the valid and binding obligation of SLFC, enforceable in
accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws of
general application affecting enforcement of creditors' rights or by general
principles of equity.
7.04 AUTHORITY; NO BREACH. SLFC has the requisite corporate power and
authority to execute and deliver this Agreement and to perform its obligations
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hereunder. The execution, delivery and performance of this Agreement by SLFC and
the consummation by SLFC of the transactions contemplated hereby do not conflict
with or result in any breach of any of the provisions of, constitute a default
under, result in a violation of, result in the creation of a right of
termination or acceleration or any lien, security interest, charge or
encumbrance upon any assets of SLFC, or require any authorization, consent,
approval, exemption or other action by or notice to any court or other
governmental body, under the provisions of the Articles of Incorporation or
Bylaws of SLFC or any indenture, mortgage, lease, loan agreement or other
agreement or instrument by which SLFC is bound or affected, or any law, statute,
rule or regulation or order, judgment or decree to which SLFC or EdLinc Assets
are bound or affected.
7.05 EDLINC ASSETS "AS IS, WHERE IS". Each of the EdLinc Assets being
transferred by SLFC to EdLinc pursuant to this Agreement shall, except to the
extent of the representations, warranties and obligations of the Original Issuer
pursuant to Sections 6.05(b) and 14.02 hereof (which shall run with the EdLinc
Assets), be transferred "AS IS" and "WHERE IS" without any warranty whatsoever.
7.06 BROKERAGE. No third party shall be entitled to receive any brokerage
commissions, finder's fees, fees for financial advisory services or similar
compensation in connection with the transactions contemplated by this Agreement
based on any arrangement or agreement made by or on behalf of SLFC.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES OF EDLINC
EdLinc hereby represents and warrants to the Original Issuer and SLFC that:
8.01 INCORPORATION AND CORPORATE POWER. EdLinc is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware and has all requisite corporate power and authority to enter into
this Agreement and perform its obligations hereunder.
8.02 SUBSIDIARY OF EDLINC. EdLinc is a wholly-owned subsidiary of SLFC,
and EdLinc does not own any equity interest in any other corporation,
partnership or other entity.
8.03 EXECUTION, DELIVERY; VALID AND BINDING AGREEMENT. The execution,
delivery and performance of this Agreement by EdLinc and the consummation of the
transactions contemplated hereby have been duly and validly authorized by all
requisite corporate action, and no other corporate proceedings on its part are
necessary to authorize the execution, delivery and performance of this
Agreement.
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This Agreement has been duly executed and delivered by EdLinc and, assuming that
this Agreement is the valid and binding agreement of the Original Issuer and
SLFC, constitutes the valid and binding obligation of EdLinc, enforceable in
accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws of
general application affecting enforcement of creditors' rights or by general
principles of equity.
8.04 AUTHORITY; NO BREACH. EdLinc has the requisite corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder. The execution, delivery and performance of this Agreement by EdLinc
and the consummation of the transactions contemplated hereby do not conflict
with or result in any breach of any of the provisions of, or constitute a
default under, result in a violation of, result in the creation of a right of
termination or acceleration or any lien, security interest, charge or
encumbrance upon any assets of EdLinc, or require any authorization, consent,
approval, exemption or other action by or notice to any court or other
governmental body, under the provisions of the Certificate of Incorporation or
Bylaws of EdLinc or under any indenture, mortgage, lease, loan agreement or
other agreement or instrument by which EdLinc is bound or affected, or any law,
statute, rule or regulation or order, judgment or decree to which EdLinc or the
EdLinc Assets are subject.
ARTICLE IX
COVENANTS OF ORIGINAL ISSUER
9.01 CONDUCT OF THE BUSINESS. The Original Issuer agrees from the date
hereof until the Closing Date, unless otherwise consented to by SLFC in writing,
the Original Issuer shall not, directly or indirectly, sell, pledge, dispose of
or encumber any of the SLFC Assets, except in the ordinary course of business.
9.02 COOPERATION. The Original Issuer shall take all commercially
reasonable actions to cause the transfer documents and such other documents
which shall cause the SLFC Assets to be transferred to SLFC to be duly executed
by the appropriate officers of the Original Issuer.
9.03 CONDITIONS. The Original Issuer shall take all commercially reasonable
actions necessary to cause the conditions set forth in Section 12.01 to be
satisfied and to consummate the transactions contemplated herein as soon as
reasonably possible after the satisfaction thereof.
9.04 ON-GOING COVENANTS. The Original Issuer will at all times, whether
before or after the Closing:
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(a) comply with restrictions (whether characterized as expectations,
prohibitions or otherwise) contained in the Certificate as to No Arbitrage
delivered in connection with the issuance of the Series 1998 Notes on the
investment of any of its moneys (including the Excluded Assets and any
moneys pledged under indentures (in addition to the Series 1998 Indenture)
relating to its outstanding bonds, notes or other indebtedness) not
transferred pursuant to this Agreement;
(b) take all such action, and refrain from taking such action, as is
necessary to comply with the provisions of Section 150(d)(3) of the Code
(including, without limitation, ensuring that the Original Issuer continues
to be described in Section 501(c)(3) of the Code, ceases to be described in
Section 150(d)(2)(A) and (B) of the Code and maintains at least eighty
percent (80%) of its board of directors as "independent" within the meaning
of Section 150(d)(3)(C)(iii) of the Code) in effecting the transfers and
assumptions provided for in this Agreement; and
(c) take all such action (including, without limitation, the
preparation and filing of any amendments to the Original Issuer's Plan),
and refrain from taking such action, as is necessary to comply with the
provisions of the Original Issuer's Plan and as is necessary to comply with
the requirements of the Higher Education Act relating to plans for doing
business, so that the receipt by the Trustee of special allowance payments
with respect to student loans included in the SLFC Assets and the Edlinc
Assets will not be adversely affected.
For purposes of complying with the foregoing clause (b), the Original Issuer
agrees that no compensation will be paid to directors of the Original Issuer who
are also directors or officers of SLFC or EdLinc, or both, for any period after
the Closing Date unless the Original Issuer has first obtained a study or report
prepared by an independent firm of accountants or other qualified organization
to the effect that any compensation proposed to be so paid is reasonable for the
services rendered solely to the Original Issuer (excluding, for this purpose,
any services such directors may render to SLFC or EdLinc, for which such
directors will not be entitled to compensation). A copy of any such report or
study shall be delivered to the Original Issuer, SLFC, EdLinc and Dorsey &
Whitney LLP.
9.05 NONPETITION COVENANT. The Original Issuer shall not petition or
otherwise invoke the process of any court or government authority for the
purpose of commencing or sustaining a case against EdLinc under any federal or
state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of EdLinc or any substantial part of its property, or ordering the winding up or
liquidation of the affairs of EdLinc.
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9.06 VALUATION OF SLFC ASSETS. The Original Issuer shall, within thirty
days after the Closing, deliver to SLFC and Dorsey & Whitney LLP a valuation by
Smith Barney Inc. or such other qualified entity as the Original Issuer shall
designate and SLFC shall reasonably find acceptable, of the fair market value of
the SLFC Assets (as reduced by the SLFC Liabilities) as of the Closing. Such
valuation shall be made in accordance with, and shall be used in determining the
redemption price of the Class A Common Stock pursuant to, Section
150(d)(3)(D)(ii)(II) of the Code.
9.07 TRANSFER OF SLFC STOCK. So long as any of the Series 1998 Notes, or
any other outstanding bonds, notes or other indebtedness of the Original Issuer,
are outstanding, the Original Issuer shall not transfer any portion or all of
the Class A Common Stock of SLFC unless it has received an opinion from
nationally-recognized bond counsel that such transfer will not adversely affect
the exclusion from gross income for federal income tax purposes of interest on
such Series 1998 Notes or other outstanding bonds, notes or other indebtedness
of the Original Issuer.
ARTICLE X
COVENANTS OF SLFC
SLFC covenants and agrees with the Original Issuer as follows:
10.01 CONDITIONS. SLFC shall take all commercially reasonable actions
necessary to cause the conditions set forth in Section 12.02 to be satisfied and
to consummate the transactions contemplated herein as soon as reasonably
possible after the satisfaction thereof.
10.02 ON-GOING COVENANTS. SLFC will at all times, whether before or after
Closing:
(a) comply with the restrictions (whether characterized as
expectations, prohibitions or otherwise) contained in the Certificate as to
No Arbitrage delivered in connection with the issuance of the Series 1998
Notes on the investment of any of its moneys not transferred to EdLinc as
part of the EdLinc Assets;
(b) take all such action, and refrain from taking such action, as is
necessary to comply with Section 150(d)(3) of the Code (including, without
limitation, ensuring that the Original Issuer maintains at least eighty
percent (80%) of its board of directors as "independent" within the meaning
of Section 150(d)(3)(C)(iii) of the Code) in effecting the transfers and
assumptions provided for in this Agreement; and
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(c) take all such action (including, without limitation, performance
of its obligations under Section 23 of the Servicing Agreement), and
refrain from taking such action, as is necessary to comply with the
provisions of the Original Issuer's Plan and as is necessary to comply with
the requirements of the Higher Education Act relating to plans for doing
business, so that the receipt by the Trustee of special allowance payments
with respect to student loans included in the SLFC Assets and the Edlinc
Assets will not be adversely affected.
For purposes of complying with the foregoing clause (b), SLFC agrees that no
compensation will be paid, directly or indirectly, to any director of the
Original Issuer for any services performed in connection with SLFC or any
services as a member of the board of directors or as an officer of SLFC.
10.03 NONPETITION COVENANT. SLFC shall not petition or otherwise invoke the
process of any court or government authority for the purpose of commencing or
sustaining a case against EdLinc under any federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of EdLinc or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of EdLinc.
10.04 TRANSFER OF EDLINC STOCK. So long as any of the Series 1998 Notes, or
any other outstanding bonds, notes or other indebtedness of the Original Issuer,
are outstanding, SLFC shall not transfer any portion or all of the stock of
EdLinc unless it has received an opinion from nationally-recognized bond counsel
that such transfer will not adversely affect the exclusion from gross income for
federal income tax purposes of interest on such Series 1998 Notes or other
outstanding bonds, notes or other indebtedness of the Original Issuer.
ARTICLE XI
COVENANTS OF EDLINC
EdLinc covenants and agrees with the Original Issuer as follows:
11.01 CONDITIONS. EdLinc shall take all commercially reasonable actions
necessary to cause the conditions set forth in Section 12.03 to be satisfied and
to consummate the transactions contemplated herein as soon as reasonably
possible after the satisfaction thereof.
11.02 ON-GOING COVENANTS. EdLinc will at all times, whether before or after
Closing:
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(a) comply with the restrictions (whether characterized as
expectations, prohibitions or otherwise) contained in the Certificate as to
No Arbitrage delivered in connection with the issuance of the Series 1998
Notes;
(b) take all such action, and refrain from taking such action, as is
necessary to comply with Section 150(d)(3) of the Code (including, without
limitation, ensuring that the Original Issuer maintains at least eighty
percent (80%) of its board of directors as "independent" within the meaning
of Section 150(d)(3)(C)(iii) of the Code) in effecting the transfers and
assumptions provided for in this Agreement; and
(c) take all such action, and refrain from taking such action, as is
necessary to comply with the provisions of the Original Issuer's Plan and
as is necessary to comply with the requirements of the Higher Education Act
relating to plans for doing business, so that the receipt by the Trustee of
special allowance payments with respect to student loans included in the
SLFC Assets and the Edlinc Assets will not be adversely affected.
For purposes of complying with the foregoing clause (b), EdLinc agrees that no
compensation will be paid, directly or indirectly, to any director of the
Original Issuer for any services performed in connection with EdLinc or any
services as a member of the board of directors or as an officer of EdLinc.
ARTICLE XII
CONDITIONS TO CLOSING
12.01 CONDITIONS TO SLFC'S OBLIGATIONS. The obligation of SLFC to
consummate the transactions contemplated by this Agreement is subject to the
satisfaction of the following conditions on or before the Closing Date:
(a) The representations and warranties set forth in Articles VI and
VIII hereof shall be true and correct in all material respects at and as of
the Closing Date as though then made, except that any such representation
or warranty made as of a specified date (other than the date hereof) shall
only need to have been true on and as of such date;
(b) The Original Issuer and EdLinc shall have performed in all
material respects all of the covenants and agreements required to be
performed and complied with by them under this Agreement prior to the
Closing;
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<PAGE>
(c) The Original Issuer shall have obtained, or caused to be
obtained, each consent and approval required in order to complete the
transactions contemplated hereby;
(d) EdLinc shall have obtained, or caused to be obtained, each
consent and approval required in order to complete the transactions
contemplated hereby;
(e) There shall not be threatened, instituted or pending any action
or proceeding, before any court or governmental authority or agency,
domestic or foreign, challenging or seeking to make illegal, or to delay or
otherwise directly or indirectly restrain or prohibit, the consummation of
the transactions contemplated hereby or seeking to obtain material damages
in connection with such transactions;
(f) On the Closing Date, the Original Issuer shall have delivered to
SLFC the following:
(i) the Assignment and Assumption Agreement, the Series 1997-A
Assignment and Assumption Agreement, the SLFC Bill of Sale and such
other instruments of conveyance, transfer, assignment and delivery as
SLFC shall have reasonably requested pursuant to Section 5.02 hereof,
and
(ii) a certificate of an appropriate officer of the Original
Issuer, dated the Closing Date, stating that the conditions set forth
in subsections 12.01(a), (b) and (c) above to be satisfied by the
Original Issuer have been satisfied;
(g) On the Closing Date, EdLinc shall have delivered to SLFC the
following:
(i) the Assignment and Assumption Agreement, and
(ii) a certificate of an appropriate officer of EdLinc, dated
the Closing Date, stating that the conditions set forth in
subsections 12.01(a), (b) and (d) to be satisfied by EdLinc have been
satisfied.
12.02 CONDITIONS TO ORIGINAL ISSUER'S OBLIGATIONS. The obligations of the
Original Issuer to consummate the transactions contemplated by this Agreement
are subject to the satisfaction of the following conditions on or before the
Closing Date:
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(a) The representations and warranties set forth in Articles VII and
VIII hereof will be true and correct in all material respects at and as of
the Closing as though then made;
(b) SLFC and EdLinc shall have performed in all material respects all
the covenants and agreements required to be performed by them under this
Agreement prior to the Closing;
(c) SLFC shall have obtained, or caused to be obtained, each consent
and approval required in order to complete the transactions contemplated
hereby;
(d) EdLinc shall have obtained, or caused to be obtained, each
consent and approval required in order to complete the transactions
contemplated hereby;
(e) There shall not be threatened, instituted or pending any action
or proceeding, before any court or governmental authority or agency,
domestic or foreign, challenging or seeking to make illegal, or to delay or
otherwise directly or indirectly restrain or prohibit, the consummation of
the transactions contemplated hereby or seeking to obtain material damages
in connection with such transactions;
(f) On the Closing Date, SLFC and EdLinc shall have delivered to the
Original Issuer the Assignment and Assumption Agreement;
(g) On the Closing Date, SLFC shall have delivered to the Original
Issuer the following:
(i) the SLFC Liabilities Assumption Agreements,
(ii) the Series 1997-A Assignment and Assumption Agreement, and
(iii) a certificate of an appropriate officer of SLFC dated the
Closing Date, stating that the conditions set forth in subsections
12.02(a), (b) and (c) above to be satisfied by SLFC have been
satisfied; and
(h) On the Closing Date, EdLinc shall have delivered to the Original
Issuer a certificate of an appropriate officer of EdLinc, dated the Closing
Date, stating that the conditions set forth in subsections 12.02(a), (b)
and (d) above to be satisfied by EdLinc have been satisfied.
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<PAGE>
12.03 CONDITIONS TO EDLINC'S OBLIGATIONS. The obligations of EdLinc to
consummate the transactions contemplated by this Agreement are subject to the
satisfaction of the following conditions on or before the Closing Date:
(a) The representations and warranties set forth in Articles VI and
VII hereof shall be true and correct in all material respects at and as of
the Closing Date as though then made, except that any such representation
or warranty made as of a specified date (other than the date hereof) shall
only need to have been true on and as of such date;
(b) The Original Issuer and SLFC shall have performed in all material
respects all of the covenants and agreements required to be performed and
complied with by them under this Agreement prior to the Closing;
(c) The Original Issuer shall have obtained, or caused to be
obtained, each consent and approval required in order to complete the
transactions contemplated hereby;
(d) SLFC shall have obtained, or caused to be obtained, each consent
and approval required in order to complete the transactions contemplated
hereby;
(e) There shall not be threatened, instituted or pending any action
or proceeding, before any court or governmental authority or agency,
domestic or foreign, challenging or seeking to make illegal, or to delay or
otherwise directly or indirectly restrain or prohibit, the consummation of
the transactions contemplated hereby or seeking to obtain material damages
in connection with such transactions;
(f) On the Closing Date, the Original Issuer and SLFC shall have
delivered to EdLinc the Assignment and Assumption Agreement and such other
instruments of conveyance, transfer, assignment and delivery as EdLinc
shall have reasonably requested pursuant to Section 5.02 hereof;
(g) On the Closing Date, the Original Issuer shall have delivered to
EdLinc a certificate of an appropriate officer of the Original Issuer,
dated the Closing Date, stating that the conditions set forth in subsection
12.03(a), (b) and (c) above to be satisfied by the Original Issuer have
been satisfied; and
(h) On the Closing Date, SLFC shall have delivered to EdLinc a
certificate of an appropriate officer of SLFC, dated the Closing Date,
stating that the conditions set forth in subsection 12.03(a), (b) and (d)
above to be satisfied by SLFC have been satisfied.
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ARTICLE XIII
TERMINATION
13.01 TERMINATION. This Agreement may be terminated at any time prior to
the Closing:
(a) by the mutual consent of SLFC and the Original Issuer;
(b) by either SLFC or the Original Issuer if (i) there has been a
material misrepresentation, breach of warranty or breach of covenant on the
part of the other (including, for SLFC, on the part of EdLinc) in the
representations, warranties and covenants set forth in this Agreement, or
(ii) the tax consequences expected by either party are threatened to be
changed by any future or pending legislation, Treasury Regulations,
administrative interpretations or Court decisions; or
(c) by either SLFC or the Original Issuer if the transactions
contemplated hereby have not been consummated by March 31, 1998; provided
that neither SLFC nor the Original Issuer will be entitled to terminate
this Agreement pursuant to this Section 13.01(c) if such party's
(including, for SLFC, EdLinc's) willful breach of this Agreement has
prevented the consummation of the transactions contemplated hereby.
13.02 EFFECT OF TERMINATION. In the event of termination of this Agreement
by either SLFC or the Original Issuer as provided in Section 14.01, this
Agreement shall become void and there shall be no liability on the part of any
of SLFC, EdLinc or the Original Issuer, or their respective stockholders,
officers, or directors, except that Sections 15.01 and 15.09 hereof shall
survive indefinitely, and except with respect to willful breaches of this
Agreement prior to the time of such termination.
ARTICLE XIV
SURVIVAL; INDEMNIFICATION
14.01. SURVIVAL. The covenants contained in this Agreement shall survive
the Closing.
14.02. INDEMNIFICATION OF SLFC AND EDLINC. The Original Issuer agrees to
indemnify SLFC and EdLinc with respect to, and hold SLFC and EdLinc harmless
from, any loss, liability or expense (including, but not limited to, reasonable
legal fees) which SLFC or EdLinc may directly or indirectly incur or suffer by
reason of, or which results, arises out of or is based upon (a) the inaccuracy
of any representation or warranty made by the Original Issuer in Section
6.05(b), or (b) the failure of the
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Original Issuer to comply with any covenants or other commitments made by the
Original Issuer in this Agreement.
14.03. INDEMNIFICATION OF ORIGINAL ISSUER. SLFC agrees to indemnify the
Original Issuer with respect to, and hold the Original Issuer harmless from, any
loss, liability or expense (including, but not limited to, reasonable legal
fees) which the Original Issuer may directly or indirectly incur or suffer by
reason of, or which results, arises out of or is based upon (a) the inaccuracy
of any representation or warranty made by SLFC or EdLinc in this Agreement, (b)
the failure of SLFC to comply with any covenants made by SLFC in this Agreement,
or (c) the failure of EdLinc to comply with any covenants made by EdLinc in this
Agreement.
14.04. LEGAL PROCEEDINGS. In the event SLFC, EdLinc or the Original
Issuer becomes involved in any legal, governmental or administrative proceeding
which may result in indemnification claims hereunder, such party shall promptly
notify the other party against whom indemnity may be sought (the "Indemnifying
Party") in writing and in full detail of the filing, and of the nature of such
proceeding. The Indemnifying Party may, at its option and expense, defend any
such proceeding if the proceeding could give rise to an indemnification
obligation hereunder. If the Indemnifying Party elects to defend any
proceeding, it shall have full control over the conduct of such proceeding,
although each party being indemnified shall have the right to retain legal
counsel at its own expense and shall have the right to approve any settlement of
any dispute giving rise to such proceeding, provided that such approval may not
be withheld unreasonably by the party being indemnified. The party being
indemnified shall reasonably cooperate with the Indemnifying Party in such
proceeding.
ARTICLE XV
MISCELLANEOUS
15.01 EXPENSES. Except as otherwise expressly provided for herein, the
Original Issuer will pay all of the expenses incurred by the parties hereto
(including attorneys' and accountants' fees) in connection with the negotiation
of this Agreement, the performance of their respective obligations hereunder and
the consummation of the transactions contemplated by this Agreement (whether
consummated or not).
15.02 FURTHER ASSURANCES. The Original Issuer, SLFC and EdLinc each agrees
that, on and after the Closing Date, it shall take all appropriate action (with
any out-of-pocket expenses to be paid by the Original Issuer) and execute any
documents, instruments or conveyances of any kind which may be reasonably
necessary or advisable to carry out the transfers of assets and assumptions of
liabilities provided for herein.
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15.03 AMENDMENT AND WAIVER. This Agreement may not be amended or waived
except in a writing executed by the party against which such amendment or waiver
is sought to be enforced. No such amendment or waiver shall be effective unless
all parties to this Agreement have received an opinion from nationally-
recognized bond counsel that such amendment or waiver will not adversely affect
the exclusion from gross income for federal income tax purposes of interest on
any of the Series 1998 Notes or any other outstanding bonds, notes or other
indebtedness of the Original Issuer. No course of dealing between or among any
persons having any interest in this Agreement will be deemed effective to modify
or amend any part of this Agreement or any rights or obligations of any person
under or by reason of this Agreement.
15.04 NOTICES. All notices, demands and other communications to be given or
delivered under or by reason of the provisions of this Agreement will be in
writing and will be deemed to have been given when personally delivered or three
business days after being mailed by first class U.S. mail, return receipt
requested, or when receipt is acknowledged, if sent by facsimile, telecopy or
other electronic transmission device. Notices, demands and communications to the
parties will, unless another address is specified in writing, be sent to the
address indicated below:
Notices to EdLinc: Education Loans Incorporated
- - ----------------- 105 First Avenue Southwest, Suite 200
Aberdeen, South Dakota 57401
Attn: President
Telecopy: (605) 622-4574
with a copy to:
--------------
Dorsey & Whitney LLP
220 South Sixth Street
Minneapolis, Minnesota 55402
Attention: Michael E. Reeslund, Esq.
Telecopy: (612) 340-2644
Notices to SLFC: Student Loan Finance Corporation
- - --------------- 105 First Avenue Southwest
Aberdeen, South Dakota 57401
Attn: President
Telecopy: (605) 622-4574
with a copy to:
--------------
Dorsey & Whitney LLP
220 South Sixth Street
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Minneapolis, Minnesota 55402
Attention: Michael E. Reeslund, Esq.
Telecopy: (612) 340-2644
Notices to Original Issuer: Education Loans Incorporated
- - -------------------------- 105 First Avenue Southwest
Aberdeen, South Dakota 57401
Attn: President
Telecopy: (605) 622-4574
with copies to:
--------------
Rollyn H. Samp
101 East 38th Street
Sioux Falls, South Dakota 57101
Telecopy: (605) 334-6630
Dorsey & Whitney LLP
220 South Sixth Street
Minneapolis, Minnesota 55402
Attention: Michael E. Reeslund, Esq.
Telecopy: (612) 340-2644
Copies of any such notices will also be sent to Smith Barney Inc. at the
following address, but failure to do so shall not affect the effectiveness of
any notice otherwise given in accordance with the foregoing provisions of this
Section:
Notices to Smith Barney Inc.: Smith Barney Inc.
- - ---------------------------- 388 Greenwich Street, 32nd Floor
New York, New York 10013
Attn: Student Loan Finance Group
Telecopy: (212) 816-0598
15.05 ASSIGNMENT. This Agreement and all of the provisions hereof will be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, except that neither this Agreement nor any of
the rights, interests or obligations hereunder may be assigned by any party
hereto without the prior written consent of the other parties hereto.
15.06 SEVERABILITY. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under
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applicable law, such provision will be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
15.07 COMPLETE AGREEMENT. This Agreement and the Schedules and Exhibits
hereto, the Disclosure Schedule and the other documents referred to herein
contain the complete agreement between the parties and supersede any prior
understandings, agreements or representations by or between the parties, written
or oral, which may have related to the subject matter hereof in any way.
15.08 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, any one of which need not contain the signatures of more than one
party, but all such counterparts taken together will constitute one and the same
instrument.
15.09 GOVERNING LAW. The internal law, without regard to conflicts of laws
principles, of the State of South Dakota will govern all questions concerning
the construction, validity and interpretation of this Agreement and the
performance of the obligations imposed by this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
EDUCATION LOANS INCORPORATED,
a South Dakota not-for-profit corporation
By /s/ A. Norgrin Sanderson
----------------------------------------
A. Norgrin Sanderson, President
STUDENT LOAN FINANCE CORPORATION
By /s/ A. Norgrin Sanderson
----------------------------------------
A. Norgrin Sanderson, President
EDUCATION LOANS INCORPORATED,
a Delaware corporation
By /s/ A. Norgrin Sanderson
----------------------------------------
A. Norgrin Sanderson, President
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LIST OF SCHEDULES AND EXHIBITS
SCHEDULE 1.01.................................................. EXCLUDED ASSETS
SCHEDULE 1.02............................................. EXCLUDED LIABILITIES
EXHIBIT A.......................... Form of Assignment and Assumption Agreement
EXHIBIT B............ Form of Series 1997-A Assignment and Assumption Agreement
EXHIBIT C............................................ Form of SLFC Bill of Sale
EXHIBIT D........................ Form of SLFC Liabilities Assumption Agreement
The above-described schedules and exhibits have been omitted from this Exhibit
99.4 to the Registration Statement on Form S-1 of Education Loans Incorporated
(SEC File No. 333-26679-01) (the "Registration Statement"). Exhibit A above has
been filed as Exhibit 99.3 to the Registration Statement. The Registrant hereby
undertakes to provide a copy of any of the above schedules and exhibits to the
Securities and Exchange Commission upon request as supplemental information.
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