EXHIBIT 99.2
[Draft 3/11/98]
BROKER-DEALER AGREEMENT
between
BANKERS TRUST COMPANY,
as Auction Agent
and
SMITH BARNEY INC.,
as Broker-Dealer
Dated as of March 17, 1998
Relating to
CLASSNOTES TRUST 1997-I
ASSET BACKED NOTES
SERIES 1998-1
BROKER-DEALER AGREEMENT
This BROKER-DEALER AGREEMENT (the "Broker-Dealer Agreement"), dated as
of March 17, 1998, is by and between Bankers Trust Company, a New York banking
corporation (together with its successors and assigns, the Auction Agent"),
pursuant to authority granted to it in the Auction Agent Agreement, defined
below, acting not in its individual capacity, but solely as agent for ClassNotes
Trust l997-I, a Pennsylvania business trust (the "Issuer") and SMITH BARNEY INC.
(together with its successors and assigns, the "Broker-Dealer").
RECITALS
The Issuer proposes to cause the Trustee (defined below) to
authenticate and deliver $410,000,000 aggregate principal amount of its Asset
Backed Notes, Series 1998-1, Class A-7 (the "Class A-7 Notes"), Class A-8 (the
"Class A-8 Notes"), Class A-9 (the "Class A-9 Notes") and Class A-10 (the "Class
A-10 Notes" and, together with the Class A-7 Notes, the Class A-8 Notes and the
Class A-9 Notes, the "Series 1998-1 Notes" or the "Notes"). The Series 1998-1
Notes are being issued under the Third Terms Supplement dated as of March 17,
1998 (herein, the "Third Terms Supplement") executed in accordance with the
Indenture dated as of March 21, 1997 (as amended and supplemented from time to
time, the "Master Indenture"), between the Issuer and Bankers Trust Company (the
"Indenture Trustee"). The Notes are being issued as auction rate securities.
The Third Terms Supplement provides that the Class Interest Rate for
each Class of Notes for each applicable Interest Period after the Initial Period
shall equal the lesser of the Net Loan Rate and the Auction Rate, but in no
event shall exceed the applicable Class Interest Rate Limitation.
Pursuant to Section 2.9 (a) of the Auction Agent Agreement dated as of
March 17, 1998 among the Indenture Trustee, the Auction Agent and the Issuer
(the "Auction Agent Agreement"), the Indenture Trustee has directed the Auction
Agent to execute and deliver this Broker-Dealer Agreement.
The Auction Procedures require the participation of one or more
Broker-Dealers.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Auction Agent, as agent of the Issuer, and the
Broker-Dealer agree as follows:
Section 1. DEFINITIONS AND RULES OF CONSTRUCTION
1.1. TERMS DEFINED BY REFERENCE TO THE MASTER INDENTURE AND THIRD
TERMS SUPPLEMENT. Capitalized terms used herein and not otherwise defined herein
shall have the meanings given such terms in the Master Indenture and the Third
Terms Supplement.
1.2. TERMS DEFINED HEREIN. As used herein and in the Settlement
Procedures, defined below, the following terms shall have the following
meanings, unless the context otherwise requires:
APPLICABLE INTEREST RATE" shall mean the applicable Class Interest
Rate for each Class of Notes, as determined pursuant to the Third Terms
Supplement.
"AUTHORIZED OFFICER" shall mean, with respect to the Auction Agent,
each Managing Director, Vice President, Assistant Vice President, and Assistant
Treasurer of the Auction Agent and every other officer of the Auction Agent
assigned to its Corporate Trust Group and every other officer or employee of
Auction Agent designated as an "Authorized Officer" for purposes of this
Agreement in a communication to the Broker-Dealer.
"BENEFICIAL OWNER" shall mean a beneficial owner of any of the Notes.
"BROKER-DEALER OFFICER" shall mean each officer or employee of the
Broker-Dealer designated as a "Broker-Dealer Officer for purposes of this
Broker-Dealer Agreement in a communication to the Auction Agent.
"NOTICE OF FAILURE TO DELIVER OR MAKE PAYMENT" shall mean a notice
substantially in the form of Exhibit D hereto.
"NOTICE OF TRANSFER" shall mean a notice substantially in the form of
Exhibit C hereto.
"ORDER FORM" shall mean the form to be submitted by any Broker-Dealer
on or prior to any Auction Date substantially in the form of Exhibit B hereto.
"SETTLEMENT PROCEDURES" shall mean the Settlement Procedures attached
hereto as Exhibit A.
1.3. RULES OF CONSTRUCTION. Unless the context or use indicate another
or different meaning or intent, the following rules shall apply to the
construction of this Agreement;
(a) Words importing the singular number shall include the plural
number and vice versa.
(b) The captions and headings herein are solely for convenience of
reference and shall not constitute a part of this Agreement nor shall they
affect its meaning, construction or effect.
(c) The words "hereof," "herein," "hereto," and other words of similar
import refer to this Broker-Dealer Agreement as a whole.
(d) All references herein to a particular time of day shall be to New
York City time.
Section 2. THE AUCTION
2.1. INCORPORATION BY REFERENCE OF AUCTION PROCEDURES AND SETTLEMENT
PROCEDURES.
(a) On each Auction Date, the provisions of the Auction Procedures
will be followed by the Auction Agent for the purpose of determining the
Applicable Interest Rate for each Auction Period after the Initial Period. Each
periodic operation of such procedures is hereinafter referred to as an
"Auction."
(b) All of the provisions contained in the Auction Procedures and the
Settlement Procedures are incorporated herein by reference in their entirety and
shall be deemed to be a part of this Broker-Dealer Agreement to the same extent
as if such provisions were fully set forth herein.
(c) The Broker-Dealer and other Broker-Dealers may participate in
Auctions for their own accounts.
2.2. PREPARATION FOR EACH AUCTION.
(a) Not later than 9:30 A.M. on each Auction Date for a Class of the
Notes, the Auction Agent shall advise the Broker- Dealer by telephone of the All
Hold Rate, the Maximum Auction Rate, the Net Loan Rate (based upon information
provided by the Administrator), the One-Month LIBOR and the Three-Month LIBOR.
(b) In the event the Auction Date for any Auction shall be changed
after the Auction Agent has given notice of such Auction Date pursuant to clause
(vii) of paragraph (a) of the Settlement Procedures, the Auction Agent, by
telephone (confirmed in writing), telecopy or such other means as the Auction
Agent deems practicable, shall give notice of such change to the Broker-Dealer
not later than the earlier of 9:15 A.M. on the new Auction Date and 9:15 A.M. on
the old Auction Date. Thereafter, the Broker-Dealer shall use its best efforts
to promptly notify its customers who are Existing Noteholders of such change in
the Auction Date.
(c) From time to time upon request of the Auction Agent, the
Broker-Dealer shall provide the Auction Agent with a statement of the aggregate
amount of Notes held by the Broker- Dealer as an Existing Noteholder for its own
account or otherwise.
(d) The Auction Agent shall send by telecopy or other means a copy of
any Notice of Notes Outstanding received from the Indenture Trustee to the
Broker-Dealer in accordance with Section 4.3 hereof.
2.3. AUCTION SCHEDULE: METHOD OF SUBMISSION OF ORDERS.
(a) The Auction Agent shall conduct Auctions for the Notes in
accordance with the schedule set forth below. Such schedule may be changed by
the Auction Agent with the consent of the Indenture Trustee and the Market
Agent, which consent shall not be unreasonably withheld or delayed. The Auction
Agent shall give written notice of any such change to the Broker-Dealer and the
Eligible Lender Trustee. Such notice shall be given prior to the close of
business on the Business Day next preceding the first Auction Date on which any
such change shall be effective.
By 9:30 A.M. The Auction Agent advises the Indenture
Trustee and the Broker-Dealers of the
Maximum Auction Rate, the All Hold Rate,
the Net Loan Rate (as provided by the
Administrator) and One-Month LIBOR or
Three-Month LIBOR, as applicable, to
be used in determining the Auction
Rate under the Auction Procedures, the
Third Terms Supplement and the Auction
Agent Agreement.
9:30 A.M. - Auction Agent assembles information
12:30 P.M. communicated to it by Broker-Dealers as
provided in Section 2.5.1(c)(i) of the
Third Terms Supplement. The Submission
Deadline is 12:30 P.M.
Not earlier The Auction Agent makes determinations
than 12:30 P.M. pursuant to Section 2.5.1(c)(i) of the
Third Terms Supplement.
By approximately The Auction Agent advises the Indenture
3:00 P.M.* or Trustee of the results of the Auction as
4:00 P.M.** provided in Section 2.5.1(c)(ii) of the
Third Terms Supplement.
Submitted Bids and Submitted
Sell Orders are accepted and
rejected in whole or in part
and Notes allocated as provided
in Section 2.5.1(d) of the
Third Terms Supplement. The
Auction Agent gives notice of
Auction results as set forth in
Section 2.4(a) hereof.
(b) The Broker-Dealer agrees to maintain a list of Potential
Noteholders and to contact the Potential Noteholders on such list on or prior to
each applicable Auction Date for the purposes of participating in the Auction on
such Auction Date.
(c) The Broker-Dealer shall submit Orders to the Auction Agent in
writing by delivering an Order Form. The Broker-Dealer shall submit separate
Orders to the Auction Agent for each Potential Noteholder or Existing Noteholder
on whose behalf the Broker-Dealer is submitting an Order and shall not net or
aggregate the Orders of different Potential Noteholders or Existing Noteholders
on whose behalf the Broker-Dealer is submitting Orders.
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* If the Class Interest Rate is the Auction Rate.
** If the Class Interest Rate is the Net Loan Rate.
(d) The Broker-Dealer shall deliver to the Auction Agent (i) a Notice
of Transfer with respect to any transfer of Notes made through the Broker-Dealer
by an Existing Noteholder to another person other than pursuant to an Auction,
and (ii) a Notice of Failure to Deliver or Make Payment with respect to the
failure of any Notes to be transferred to or payment to be made by any person
that purchased or sold Notes through the Broker- Dealer pursuant to a prior
Auction. The Auction Agent is not required to accept any notice delivered
pursuant to clauses (i) or (ii) of this subparagraph (d) with respect to an
Auction unless it is received by the Auction Agent by 3:00 P.M. on the Business
Day next preceding such Auction Date.
(e) The Broker-Dealer agrees to handle its customers' Orders in
accordance with its duties under applicable securities laws and rules.
2.4. NOTICES.
(a) On each Auction Date, the Auction Agent shall notify the
Broker-Dealer and the Administrator by telephone of the results of the Auction
as set forth in paragraph (a) of the Settlement Procedures. The Auction Agent
shall by 10:30 A.M. on the Business Day next succeeding such Auction Date if
previously requested by the Broker-Dealer notify the Broker-Dealer in writing of
the disposition of all Orders submitted by the Broker- Dealer in the Auction
held on such Auction Date.
(b) The Broker-Dealer shall notify each Existing Noteholder or
Potential Noteholder on whose behalf the Broker- Dealer has submitted an Order
as set forth in paragraph (b) of the Settlement Procedures and take such other
action as is required by the Broker-Dealer pursuant to the Settlement
Procedures.
(c) The Auction Agent shall deliver to the Broker- Dealer all notices
and certificates that the Auction Agent is required to deliver to the
Broker-Dealer pursuant to Section 2 of the Auction Agent Agreement at the times
and in the manner set forth in the Auction Agent Agreement.
2.5. SERVICE CHARGE TO BE PAID TO THE BROKER-DEALER.
(a) For each Interest Period, commencing on the Closing Date, the
Broker-Dealer shall be entitled to a fee, in an amount equal to the product of
(i) a fraction, the numerator of which is the number of days in the Interest
Period related to the Auction by which the applicable Class Interest Rate was
determined and the denominator of which is 360 times (ii) the Broker-Dealer Fee
Rate times (iii) the sum of (A) the aggregate principal amount of Notes placed
by the Broker-Dealer in such Auction that were (x) the subject of Submitted Bids
of Existing Noteholders submitted by the Broker-Dealer and continued to be held
as a result of such submission and (y) the subject of Submitted Bids of
Potential Noteholders submitted by the Broker- Dealer and purchased as a result
of such submission, plus (B) the aggregate principal amount of Notes subject to
valid Hold Orders submitted to the Auction Agent by the Broker-Dealer plus (C)
the aggregate principal amount of Notes that were covered by Hold Orders deemed
to have been submitted by Existing Noteholders that were acquired by such
Existing Noteholders through the Broker- Dealer. For purposes of subclause
(iii)(C) above, if any Existing Noteholders who acquired Notes through the
Broker-Dealer transfers those Notes to another person other than pursuant to an
Auction, then the Broker-Dealer shall continue to be the Broker- Dealer through
which the Notes so transferred were acquired; provided, however, that if the
transfer was effected by, or if the transferee is a Broker-Dealer other than the
Broker-Dealer, then such other Broker-Dealer shall be the Broker-Dealer through
which such Notes were acquired.
(b) The fee payable to the Broker-Dealer pursuant to Section 2.5(a)
above shall be calculated monthly and paid monthly, in arrears, by the Auction
Agent on the First Note Distribution Date for all Classes of Notes issued by the
Issuer occurring in each month (or if in any such month a Certificate
Distribution Date occurs prior to such first Note Distribution Date, on such
Certificate Distribution Date), commencing April 1998. Such fee shall be paid by
the Auction Agent out of the Auction Agent Fee received by the Auction Agent on
each such date pursuant to the Sale and Servicing Agreement.
2.6. SETTLEMENT.
(a) If any Existing Noteholders on whose behalf the Broker-Dealer has
submitted a Bid or Sell Order for Notes that was accepted in whole or in part
fails to instruct its Participant to deliver the Notes subject to such Bid or
Sell Order against payment therefor, the Broker-Dealer shall instruct such
Participant to deliver such Notes against payment therefor and the Broker-Dealer
may deliver to the Potential Noteholder on whose behalf the Broker-Dealer
submitted a Bid that was accepted in whole or in part, a principal amount of the
Notes that is less than the principal amount of the Notes specified in such Bid
to be purchased by such Potential Noteholder. Notwithstanding the foregoing
terms of this Section, any delivery or nondelivery of Notes that represents any
departure from the results of an Auction, as determined by the Auction Agent,
shall be of no effect unless and until the Auction Agent shall have been
notified of such delivery or non-delivery in accordance with the terms of
Section 2.3(d) hereof. The Auction Agent shall have no duty or liability with
respect to enforcement of this Section 2.6(a).
(b) Neither the Auction Agent, the Indenture Trustee, nor the Issuer
shall have any responsibility or liability with respect to the failure of an
Existing Noteholder, a Potential Noteholder, or its respective Participant to
deliver Notes or to pay for Notes sold or purchased pursuant to the Auction
Procedures or otherwise. The Auction Agent shall have no responsibility for any
adjustment to the fees paid pursuant to Section 2.5 hereof as a result of any
failure described in this Section 2.6(b).
Section 3. THE AUCTION AGENT.
3.1. DUTIES AND RESPONSIBILITIES.
(a) The Auction Agent is acting hereunder solely as agent for the
Issuer and owes no fiduciary duties to any person by reason of this
Broker-Dealer Agreement.
(b) The Auction Agent undertakes to perform such duties and only such
duties as are specifically set forth in this Broker-Dealer Agreement, and no
implied covenants or obligations shall be read into this Broker-Dealer Agreement
against the Auction Agent.
(c) In the absence of bad faith or negligence on its part, the Auction
Agent shall not be liable for any action taken, suffered, or omitted or for any
error of judgment made by it in the performance of its duties under this
Broker-Dealer Agreement. The Auction Agent shall not be liable for any error of
judgment made in good faith unless the Auction Agent shall have been negligent
in ascertaining (or failing to ascertain) the pertinent facts.
3.2. RIGHTS OF THE AUCTION AGENT.
(a) The Auction Agent may rely and shall be protected in acting or
refraining from acting upon any communication authorized by this Broker-Dealer
Agreement and upon any written instruction, notice request, direction, consent
report, certificate, share certificate or other instrument, paper or document
reasonably believed by it to be genuine. The Auction Agent shall not be liable
for acting upon any telephone communication authorized by this Broker-Dealer
Agreement which the Auction Agent believes in good faith to have been given by
the Indenture Trustee, a Broker-Dealer, the Administrator or the Issuer. The
Auction Agent may record telephone communications with the Broker-Dealers.
(b) The Auction Agent may consult with counsel of its own choice, and
the advice of such counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon.
(c) The Auction Agent shall not be required to advance, expend or risk
its own funds or otherwise incur or become exposed to financial liability in the
performance of its duties hereunder.
(d) The Auction Agent may perform its duties and exercise its rights
hereunder either directly or by or through agents or attorneys and shall not be
responsible for any willful misconduct or negligence on the part of any agent or
attorney appointed by it with due care hereunder.
3.3. THE AUCTION AQENT'S DISCLAIMER. The Auction Agent makes no
representation as to the validity, adequacy or accuracy of the recitals in this
Broker-Dealer Agreement, the Auction Agent Agreement or the validity, adequacy
or accuracy of the Notes.
Section 4. MISCELLANEOUS.
4.1. TERMINATION. Any party may terminate this Broker-Dealer Agreement
at any time upon five days' prior notice to the other party; provided, however,
that if the Broker-Dealer is Smith Barney Inc., neither the Broker-Dealer nor
the Auction Agent may terminate this Broker-Dealer Agreement without first
obtaining the prior written consent of the Trustee, the Surety Provider and the
Issuer to such termination, which consent shall not be unreasonably withheld or
delayed. For so long as the Auction Agent Agreement is effective and Smith
Barney Inc. is the sole Broker-Dealer, any termination of this Broker-Dealer
Agreement shall not be effective unless and until a successor, or substitute
Broker-Dealer Agreement becomes effective. This Broker-Dealer Agreement shall
automatically terminate (i) upon the delivery of certificates representing the
Notes pursuant to Section 2.13 of the Master Indenture, or (ii) upon termination
of the Auction Agent Agreement.
4.2. PARTICIPANT. The Broker-Dealer is, and shall remain for the term
of this Broker-Dealer Agreement, a member of, or Participant in, the Depository
(or an affiliate of such a member or Participant).
4.3. COMMUNICATIONS. Except for (i) communications authorized to be
made by telephone pursuant to this Broker-Dealer Agreement or the Auction
Procedures and (ii) communications in connection with the Auctions (other than
those expressly required to be in writing), all notices, request and other
communications to any party hereunder shall be in writing (including facsimile
or similar writing) and shall be given to such party, addressed to it, or its
address or facsimile number set forth below:
If to the Broker-Dealer,
addressed: SMITH BARNEY INC.
390 Greenwich Street
5th Floor
New York, New York 10013
Attention: Manager, Auction Rate
Products Group
Telephone: (212) 723-7082
Facsimile: (212) 723-8809
If to the Auction Agent,
addressed: BANKERS TRUST COMPANY
4 Albany Street
New York, New York 10006
Attention: Corporate Trust and Agency
Group
Telephone: (212) 250-6850
Facsimile: (212) 250-6215
If to the Indenture
Trustee,
addressed: BANKERS TRUST COMPANY
4 Albany Street
New York, New York 10006
Attention: Corporate Trust and
Agency Group
Telephone: (212) 250-6533
Facsimile: (212) 250-6439
If to the Issuer,
addressed: THE YORK BANK AND TRUST COMPANY,
c/o DAUPHIN DEPOSIT BANK AND TRUST
COMPANY
213 Market Street
Harrisburg, Pennsylvania 17101
Attention: Corporate Trust Services
Telephone: (717) 255-2387
Facsimile: (717) 231-2615
With a copy to
the Administrator: c/o The Money Store Inc.
3301 C Street
100 M
Sacramento, CA 95815
Attention: Chief Financial Officer
Telephone: (916) 554-8355
Facsimile: (916) 554-8300
If to the Surety
Provider,
addressed: Ambac Assurance Corporation
One State Street Plaza
New York, New York 10004
Attention: Structured Finance
Department/Student Loans
Telephone: (212) 668-0340
Facsimile: (212) 509-9190
or such other address or facsimile number as such party may hereafter specify
for such purpose by notice to the other party. Each such notice, request or
communication shall be effective when delivered at the address specified herein.
Communications shall be given on behalf of the Broker-Dealer by a Broker-Dealer
Officer and on behalf of the Auction Agent by an Authorized Officer of the
Auction Agent. The Broker-Dealer may record telephone communications with the
Auction Agent.
4.4. ENTIRE AGREEMENT. This Broker-Dealer Agreement contains the
entire agreement between the parties relating to the subject matter hereof, and
there are no other representations, endorsements, promises, agreements or
understandings, oral, written or inferred, between the parties relating to the
subject matter hereof.
4.5. BENEFITS. Nothing in this Broker-Dealer Agreement, express or
implied, shall give to any person, other than the Auction Agent, the Issuer, the
Broker-Dealer and their respective successors and assigns, any benefit of any
legal or equitable right, remedy or claim under this Broker-Dealer Agreement.
4.6. AMENDMENT; WAIVER.
(a) This Broker-Dealer Agreement shall not be deemed or construed to
be modified, amended, rescinded, canceled or waived, in whole or in part, except
by a written instrument signed by a duly authorized representative of the
parties hereto. This Broker-Dealer Agreement may not be amended without first
obtaining the prior written consent of the Issuer; provided that no amendment
that changes any right of consent or any notice to the Surety Provider shall
become effective without the written consent of the Surety Provider.
(b) Failure of either party to this Broker-Dealer Agreement to
exercise any right or remedy hereunder in the event of a breach of this
Broker-Dealer Agreement by the other party shall not constitute a waiver of any
such right or remedy with respect to any subsequent breach.
4.7. SUCCESSORS AND ASSIGNS. This Broker-Dealer Agreement shall be
binding upon, inure to the benefit of, and be enforceable by, the parties hereto
and their respective successors and assigns.
4.8. SEVERABILITY. If any clause, provision or section of this
Broker-Dealer Agreement shall be ruled invalid or unenforceable by any court of
competent jurisdiction, the invalidity or unenforceability of such clause,
provision or section shall not affect any remaining clause, provision or
sections hereof.
4.9. EXECUTION IN COUNTERPARTS. This Broker-Dealer Agreement may be
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.
4.10. GOVERNING LAW. This Broker-Dealer Agreement shall be governed by
and construed in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Broker-Dealer
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first above written.
BANKERS TRUST COMPANY,
as Auction Agent
By:/s/ WILLIAM D. NUNEZ
Name: William D. Nunez
Title: Assistant Treasurer
SMITH BARNEY INC.,
as Broker-Dealer
By:/s/ JOHN HUPALO
Name: John Hupalo
Title: Director
Pursuant to and in accordance with Section 2.9 of the Auction Agent Agreement
(defined above), the undersigned consents to the execution of the above
Broker-Dealer Agreement.
BANKERS TRUST COMPANY,
as Indenture Trustee
By /s/ JENNA KAUFMAN
Name: Jenna Kaufman
Title: Vice President
EXHIBIT A TO BROKER-DEALER AGREEMENT
SETTLEMENT PROCEDURES
If not otherwise defined below, capitalized terms used herein shall
have the meanings given such terms in the Third Terms Supplement.
(a) Not later than (1) 3:00 P.M. if the Class Interest Rate is the
Auction Rate or (2) 4:00 P.M. if the Class Interest Rate is the Net Loan Rate on
each Auction Date, the Auction Agent shall notify by telephone each
Broker-Dealer that participated in the Auction held on such Auction Date and
submitted an Order on behalf of an Existing Noteholder or Potential Noteholder
of:
(i) the Class Interest Rate fixed for the next Interest Period;
(ii) whether there were Sufficient Bids in such Auction;
(iii) if such Broker-Dealer (a "Seller's Broker Dealer") submitted
Bids or Sell Orders on behalf of an Existing Noteholder, whether such Bid
or Sell Order was accepted or rejected, in whole or in part, and the
principal amount of Notes, if any, to be sold by such Existing Noteholder;
(iv) if such Broker-Dealer (a "Buyer's Broker Dealer") submitted a Bid
on behalf of a Potential Noteholder, whether such Bid was accepted or
rejected, in whole or in part, and the principal amount of Notes, if any,
to be purchased by such Potential Noteholder;
(v) if the aggregate amount of Notes to be sold by all Existing
Noteholders on whose behalf such Seller's Broker- Dealer submitted Bids or
Sell Orders exceeds the aggregate principal amount of Notes to be purchased
by all Potential Noteholders on whose behalf such Buyer's Broker-Dealer
submitted a Bid, the name or names of one or more Buyer's Broker-Dealers
(and the name of the Participant, if any, of each such Buyer's
Broker-Dealer) acting for one or more purchasers of such excess principal
amount of Notes and the principal amount of Notes to be purchased from one
or more Existing Noteholders on whose behalf such Seller's Broker- Dealer
acted by one or more Potential Noteholders on whose behalf each of such
Buyer's Broker-Dealers acted;
(vi) if the principal amount of Notes to be purchased by all Potential
Noteholders on whose behalf such Buyer's Broker-Dealer submitted a Bid
exceeds the amount of Notes to be sold by all Existing Noteholders on whose
behalf such Sellers' Broker-Dealer submitted a Bid or a Sell Order, the
name or names of one or more Sellers' Broker-Dealers (and the name of the
Participant, if any, of each such Seller's Broker-Dealer) acting for one or
more sellers of such excess principal amount of Notes and the principal
amount of Notes to be sold to one or more Potential Noteholders on whose
behalf such Buyer's Broker-Dealer acted by one or more Existing Noteholders
on whose behalf each of such Seller's Broker-Dealers acted; and
(vii) the Auction Date for the next succeeding Auction.
(b) On each Auction Date, each Broker-Dealer that submitted an Order
on behalf of any Existing Noteholder or Potential Noteholder shall:
(i) advise each Existing Noteholder and Potential Noteholder on whose
behalf such Broker-Dealer submitted a Bid or Sell Order in the Auction on
such Auction Date whether such Bid or Sell Order was accepted or rejected,
in whole or in part;
(ii) in the case of a Broker-Dealer that is a Buyer's Broker-Dealer,
advise each Potential Noteholder on whose behalf such Buyer's Broker-Dealer
submitted a Bid that was accepted, in whole or in part, to instruct such
Potential Owner's Participant to pay such Buyer's Broker-Dealer (or its
Participant) through the Securities Depository the amount necessary to
purchase the principal amount of Notes to be purchased pursuant to such Bid
against receipt of such Notes, together with accrued interest;
(iii) in the case of a Broker-Dealer that is a Seller's Broker-Dealer,
instruct each Existing Noteholder on whose behalf such Seller's
Broker-Dealer submitted a Sell Order that was accepted, in whole or in
part, or a Bid that was accepted, in whole or in part, to instruct such
Existing Noteholder's Participant to deliver to such Seller's Broker-
Dealer (or its Participant) through the Securities Depository the principal
amount of Notes to be sold pursuant to such Order against payment
therefore;
(iv) advise each Existing Noteholder on whose behalf such
Broker-Dealer submitted an Order and each Potential Noteholder on whose
behalf such Broker-Dealer submitted a Bid of the Auction Rate for the next
Interest Period;
(v) advise each Existing Noteholder on whose behalf such Broker-Dealer
submitted an Order of the next Auction Date; and
(vi) advise each Potential Noteholder on whose behalf such
Broker-Dealer submitted a Bid that was accepted, in whole or in part, of
the next Auction Date.
(c) On the basis of the information provided to it pursuant to
paragraph (a) above, each Broker-Dealer that submitted a Bid or Sell Order in an
Auction is required to allocate any funds received by it in connection with such
Auction pursuant to paragraph (b)(ii) above, and any Notes received by it in
connection with such Auction pursuant to paragraph (b)(iii) above among the
Potential Noteholders on whose behalf such Broker-Dealer submitted Bids, the
Existing Noteholders on whose behalf such Broker-Dealer submitted Bids or Sell
Orders in such Auction, and any Broker-Dealers identified to it by the Auction
Agent following such Auction pursuant to paragraph (a)(v) or (a)(vi) above.
(d) On each Auction Date:
(i) each Potential Noteholder and Existing Noteholder with an Order in
the Auction on such Auction Date shall instruct its Participant as provided
in (b)(ii) or (b)(iii) above, as the case may be;
(ii) each Seller's Broker-Dealer that is not a Participant of the
Securities Depository shall instruct its Participant to deliver such Notes
through the Securities Depository to a Buyer's Broker-Dealer (or its
Participant) identified to such Seller's Broker-Dealer pursuant to (a)(v)
above against payment therefor; and
(iii) each Buyer's Broker-Dealer that is not a Participant in the
Securities Depository shall instruct its Participant to pay through the
Securities Depository to Seller's Broker-Dealer (or its Participant)
identified following such Auction pursuant to (a)(vi) above in the amount
necessary to purchase Notes to be purchased pursuant to (b)(ii) above
against receipt of such Notes.
(e) On the Business Date following each Auction Date:
(i) each Participant for a Bidder in the Auction on such Auction Date
referred to in (d)(i) above shall instruct the Securities Depository to
execute the transactions described under (b)(ii) or (b)(iii) above for such
Auction, and the Securities Depository shall execute such transactions;
(ii) each Seller's Broker-Dealer or its Participant shall instruct the
Securities Depository to execute the transactions described in (d)(ii)
above for such Auction, and the Securities Depository shall execute such
transactions; and
(iii) each Buyer's Broker-Dealer or its Participant shall instruct the
Securities Depository to execute the transactions described in (d)(iii)
above for such Auction, and the Securities Depository shall execute such
transactions.
(f) If an Existing Noteholder selling Notes in an Auction fails to
deliver such Notes (by authorized book-entry), a Broker-Dealer may deliver to
the Potential Noteholder on behalf of which it submitted a Bid that was accepted
a principal amount of Notes that is less than the principal amount of Notes that
otherwise was to be purchased by such Potential Noteholder. In such event, the
principal amount of Notes to be so delivered shall be determined solely by such
Broker-Dealer (but only in Authorized Denominations). Delivery of such lesser
principal amount of Notes shall constitute good delivery. Notwithstanding the
foregoing terms of this paragraph (f), any delivery or nondelivery of Notes
which shall represent any departure from the results of an Auction, as
determined by the Auction Agent, shall be of no effect unless and until the
Auction Agent shall have been notified of such delivery or nondelivery in
accordance with the provisions of the Auction Agent Agreement and the Broker-
Dealer Agreements. Neither the Indenture Trustee nor the Auction Agent will have
any responsibility or liability with respect to the failure of a Potential
Noteholder, Existing Noteholder or their respective Broker-Dealer or Participant
to take delivery of or deliver, as the case may be, the principal amount of
Notes purchased or sold pursuant to an Auction or otherwise.
EXHIBIT B TO BROKER-DEALER AGREEMENT
CLASSNOTES TRUST 1997-I
ASSET-BACKED NOTES, SERIES 1998-1
ORDER FORM
AUCTION DATE________________
ISSUE_______________________
SERIES______________________
The undersigned Broker-Dealer submits the following orders on behalf
of the Bidder(s) indicated below:
BIDS BY EXISTING OWNERS
PRINCIPAL AMOUNT OF
EXISTING NOTES (AUTHORIZED
NOTEHOLDER DENOMINATIONS ONLY) BID RATE
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
* Existing Noteholders may be described by name or other reference as
determined in the sole discretion of the Broker-Dealer.
CLASSNOTES TRUST 1997-I
ASSET-BACKED NOTES, SERIES 1998-1
BIDS BY POTENTIAL NOTEHOLDERS
PRINCIPAL AMOUNT OF
NOTES (AUTHORIZED
EXISTING DENOMINATIONS ONLY)
NOTEHOLDER BID RATE
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
NOTES:
1. If one or more Orders covering in the aggregate more than the
outstanding principal amount of Notes held by any Existing Noteholder
are submitted, such Orders shall be considered valid in the order of
priority set forth in the Auction Procedures.
2. A Hold or Sell Order may be placed only by an Existing Noteholder
covering a principal account of Notes not greater than the principal
amount currently held by such Existing Noteholder.
3. Potential Noteholders may only make Bids, each of which must specify a
rate. If more than one Bid is submitted on behalf of any Potential
Noteholders each Bid submitted shall be a separate Bid with the rate
specified herein.
4. Bids may contain no more than three figures to the right of the
decimal point (.001 of 1%):
5. An order must be submitted in principal amounts of $50,000 or integral
multiples thereof.
* Potential Noteholders may be described by name or other reference as
determined in the sole discretion of the Broker- Dealer.
NAME OF BROKER-DEALER:_______________________
AUTHORIZED SIGNATURE:_________________________
TOTAL NUMBER OF ORDERS ON THIS ORDER FORM:____
Submit to:_________________
=================
Telephone: (___) ____________
Telecopier:(___) ____________
EXHIBIT C TO BROKER-DEALER AGREEMENT
CLASSNOTES TRUST 1997-I
ASSET-BACKED NOTES, SERIES 1998-1
NOTICE OF TRANSFER
(To be used only for transfers made other
than pursuant to an Auction)
We are (check one)
___________ the Existing Noteholder indicated below*; or
___________ the Broker-Dealer for such Existing
Noteholder; or
___________ the Participant for such Existing
Noteholder.
We hereby notify you that such Existing Noteholder has transferred $_________
(must be in units of $50,000) of Notes to -----------------
-------------------------
(Existing Noteholder)
-------------------------
(Name of Broker-Dealer)
-------------------------
(Name of Participant)
By: _____________________
Printed Name: ___________
Title:___________________
* Existing Noteholders may be described by name or other reference as
determined in the sole discretion of the Broker- Dealer.
EXHIBIT D TO BROKER-DEALER AGREEMENT
CLASSNOTES 1997-I
ASSET-BACKED NOTES, SERIES 1998-1
NOTICE OF A FAILURE TO DELIVER OR MAKE PAYMENT
COMPLETE EITHER I OR II.
I. We are a Broker-Dealer for Noteholder ___________ (the
"Purchaser"), which purchased $___________ (must be in units of
Authorized Denominators) of the Notes in the Auction held on
___________ from the seller of such Notes.
II. We are a Broker-Dealer for Noteholder* _________ (the
"Seller"), which sold $________ (must be in units of Authorized
Denominators) of the Notes in the Auction held on ___________ to the
purchaser of such Notes.
We hereby notify you that (check one)
__________________ the Seller failed to deliver such
Notes to the Purchaser.
__________________ the Purchaser failed to make payment
to the Seller upon delivery of such
Notes.
--------------------------
(Name of Broker-Dealer)
By:_______________________
Name:_____________________
Title:____________________
* Noteholders may be described by name or other reference as
determined in the sole discretion of the Broker-Dealer.