Exhibit 10.7
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AUCTION AGENT AGREEMENT
by and among
EDUCATION FUNDING CAPITAL TRUST-I
as Issuer,
FIFTH THIRD BANK
as Indenture Trustee,
and
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Auction Agent
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Dated as of , 2003
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Relating to
Education Funding Capital Trust-I
$1,023,000,000 Education Loan Backed Notes
consisting of
Auction Rate Education Loan Backed Notes,
Series 2002A1-1, Series 2002A1-2, Series 2002A1-3,
Series 2002A1-4, Series 2002A1-5, Series 2002A1-6,
Series 2002A1-7, Series 2002A1-8, Series 2002A1-9,
Series 2002A1-10, Series 2002A1-11, Series 2002A1-12,
Series 2002A1-13, Series 2002B1-1, Series 2002B1-2
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TABLE OF CONTENTS
Page
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SECTION 1. DEFINITIONS AND RULES OF CONSTRUCTION............................................2
1.1 Terms Defined by Reference to Fourth Supplement.....................................2
1.2 Terms Defined Herein................................................................2
1.3 Rules of Construction...............................................................3
SECTION 2. THE AUCTION......................................................................4
2.1 Interest Rate on Notes; Incorporation by Reference of Auction Procedures and
Settlement Procedures ..............................................................4
2.2 Preparation of Each Auction; Maintenance of Existing Owner Registry.................4
2.3 All Hold Rate, Maximum Rate, Net Loan Rate, Applicable LIBOR Rate...................6
2.4 Auction Schedule....................................................................7
2.5 Changes in Auction Periods or Auction Date..........................................8
2.6 Notice of Fee Rate Change...........................................................9
2.7 Notices to Existing Owners..........................................................9
2.8 Payment Default.....................................................................9
2.9 Broker-Dealers......................................................................9
2.10 Access to and Maintenance of Auction Records.......................................10
SECTION 3. TERM OF AGREEMENT...............................................................11
SECTION 4. INDENTURE TRUSTEE...............................................................11
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE INDENTURE
TRUSTEE ........................................................................11
SECTION 6. THE AUCTION AGENT...............................................................12
6.1 Duties and Responsibilities........................................................12
6.2 Rights of the Auction Agent........................................................13
6.3 Auction Agent's Disclaimer.........................................................13
6.4 Compensation, Remedies and Indemnification.........................................13
6.5 Compensation of the Broker-Dealers.................................................14
SECTION 7. MISCELLANEOUS...................................................................15
7.1 Governing Law......................................................................15
7.2 Communications.....................................................................15
7.3 Entire Agreement...................................................................16
7.4 Benefits...........................................................................16
7.5 Amendment; Waiver..................................................................16
7.6 Successors and Assigns.............................................................17
7.7 Severability.......................................................................17
7.8 Execution in Counterparts..........................................................17
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Exhibits
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Exhibit A -- List of Initial Broker-Dealers
Exhibit B -- Notice of Ratings
Exhibit C -- Notice of Notes Outstanding
Exhibit D -- Notice of Fee Rate Change
Exhibit E -- Notice of a Payment Default
Exhibit F -- Settlement Procedures
Exhibit G -- Notice of Continuation of Auction Period
Exhibit H -- Notice of Interest Rate
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THIS AUCTION AGENT AGREEMENT, dated as of , 2003 (this "Auction
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Agent Agreement"), is being entered into by and among EDUCATION FUNDING CAPITAL
TRUST-I, a Delaware business trust (together with any successors or assigns, the
"Issuer"), FIFTH THIRD BANK, an Ohio banking corporation, as Indenture Trustee
(together with any successors or assigns, the "Indenture Trustee") under a
certain Indenture of Trust, as hereinafter defined and described, and DEUTSCHE
BANK TRUST COMPANY AMERICAS, a New York banking corporation (together with its
successors and assigns, the "Auction Agent"), acting not in its individual
capacity but solely as agent for the Issuer.
W I T N E S S E T H :
WHEREAS, the Issuer proposes to cause the Indenture Trustee to authenticate
and deliver $1,023,000,000 aggregate principal amount of its Education Loan
Backed Notes, in thirteen series designated Auction Rate Education Loan Backed
Notes, Series 2002 A1, including, Auction Rate Education Loan Backed Notes,
Series 2002A1-1 (the "Series 2002A1-1 Notes"), Auction Rate Education Loan
Backed Notes, Series 2002A1-2 (the "Series 2002A1-2 Notes"), Auction Rate
Education Loan Backed Notes, Series 2002A1-3 (the "Series 2002A1-3 Notes"),
Auction Rate Education Loan Backed Notes, Series 2002A1-4 (the "Series 2002A1-4
Notes"), Auction Rate Education Loan Backed Notes, Series 2002A1-5 (the "Series
2002A1-5 Notes"), Auction Rate Education Loan Backed Notes, Series 2002A1-6 (the
"Series 2002A1-6 Notes"), Auction Rate Education Loan Backed Notes, Series
2002A1-7 (the "Series 2002A1-7 Notes"), Auction Rate Education Loan Backed
Notes, Series 2002A1-8 (the "Series 2002A1-8 Notes"), Auction Rate Education
Loan Backed Notes, Series 2002A1-9 (the "Series 2002A1-9 Notes"), Auction Rate
Education Loan Backed Notes, Series 2002A1-10 (the "Series 2002A1-10 Notes"),
Auction Rate Education Loan Backed Notes, Series 2002A1-11 (the "Series
2002A1-11 Notes"), Auction Rate Education Loan Backed Notes, Series 2002A1-12
(the "Series 2002A1-12 Notes"), Auction Rate Education Loan Backed Notes, Series
2002A1-13 (the "Series 2002A1-13 Notes"), and in two series designated Auction
Rate Education Loan Backed Notes, Series 2002 B1, including, Auction Rate
Education Loan Backed Notes, Series 2002B1-1 (the "Series 2002B1-1 Notes"), and
Auction Rate Education Loan Backed Notes, Series 2002B1-1 (the "Series 2002B1-2
Notes" and, together with the Series 2002A1-1 Notes, Series 2002A1-2 Notes,
Series 2002A1-3 Notes, Series 2002A1-4 Notes, Series 2002A1-5 Notes, Series
2002A1-6 Notes, Series 2002A1-7 Notes, Series 2002A1-8 Notes, Series 2002A1-9
Notes, Series 2002A1-10 Notes, Series 2002A1-11 Notes, Series 2002A1-12 Notes,
Series 2002A1-13 Notes, and the Series 2002B1-1 Notes, the "Notes"). The Notes
are being issued under an Indenture of Trust dated as of May 1, 2002 (the "Base
Indenture"), as supplemented by the 2002 Series A1&B1 Supplemental Indenture of
Trust dated as of , 2003 (the "Fourth Supplement" and, together with
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the Base Indenture, the "Indenture"); and
WHEREAS, pursuant to Appendix A to the Fourth Supplement, the Auction Agent
has been appointed to act in the capacities set forth in this Auction Agent
Agreement; and
WHEREAS, the Indenture Trustee is entering into this Auction Agent
Agreement at the direction of the Issuer pursuant to the terms of the Fourth
Supplement;
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NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the Issuer, the Indenture Trustee and the Auction Agent agree
as follows:
Section 1. Definitions and Rules of Construction.
1.1. Terms Defined by Reference to Fourth Supplement. Capitalized
terms used herein and not otherwise defined herein shall have the meanings given
such terms in the Fourth Supplement.
1.2. Terms Defined Herein. As used herein and in the Settlement
Procedures (as defined below), the following terms shall have the following
meanings, unless the context otherwise requires:
"Auction" shall have the meaning specified in Section 2.1 hereof.
"Auction Agent Fee" shall have meaning specified in Section 6.4(a)
hereof.
"Auction Procedures" shall mean the provisions that are set forth in
Section 2.02 of Appendix A to the Fourth Supplement.
"Authorized Auction Agent Officer" shall mean, with respect to the
Auction Agent, each Managing Director, Vice President, Assistant Vice President
and Associate of the Auction Agent and every other officer of the Auction Agent
assigned to its Corporate Trust and Agency Group and every other officer or
employee of the Auction Agent designated as an "Authorized Auction Agent
Officer" for purposes hereof in a communication to the Indenture Trustee and the
Issuer.
"Authorized Issuer Officer" shall mean, with respect to the Issuer,
means any vice president, trust officer or other officer of the Owner Trustee
authorized to sign the document or take the action in question and every other
officer or employee of the Issuer designated as an "Authorized Issuer Officer"
for purposes hereof in a communication to the Indenture Trustee and the Auction
Agent.
"Authorized Trustee Representative" shall mean each vice president,
assistant vice president or trust officer in the corporate trust department of
the Indenture Trustee and every other officer or employee of the Indenture
Trustee designated as an "Authorized Trustee Representative" for purposes hereof
in a written communication to the Auction Agent and the Issuer.
"Broker-Dealer" shall mean, with respect to each Series of Notes, a
Person listed as a Broker-Dealer for such Series on Exhibit A hereto, as such
Exhibit A may be amended from time to time.
"Broker-Dealer Agreements" shall mean each agreement between the
Auction Agent and a Broker-Dealer substantially in the form of the Broker-Dealer
Agreements dated as of , 2003 between the Auction Agent and each of
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
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"Broker-Dealer Fee" shall have the meaning specified in Section 6.5(a)
hereof.
"Broker-Dealer Fee Rate" shall have the meaning specified in Section
6.5(b) hereof.
"Existing Owner Registry" shall mean the register maintained by the
Auction Agent pursuant to Section 2.2 hereof.
"Notice of Failure to Deliver or Make Payment" shall mean a notice
substantially in the form of Exhibit D to the Broker-Dealer Agreement.
"Notice of Fee Rate Change" shall mean a notice substantially in the
form of Exhibit D hereof.
"Notice of Payment Default" shall mean a notice substantially in the
form of Exhibit E hereto.
"Notice of Ratings" shall mean a notice substantially in the form of
Exhibit B hereto.
"Notice of Notes Outstanding" shall mean a notice substantially in the
form of Exhibit C hereto.
"Notice of Transfer" shall mean a notice substantially in the form of
Exhibit C to the Broker-Dealer Agreement.
"Participant" shall mean a member of, or participant in, the
Securities Depository.
"Settlement Procedures" shall mean the Settlement Procedures attached
as Exhibit F hereto.
1.3. Rules of Construction. Unless the context or use indicates
another or different meaning or intent, the following rules shall apply to the
construction of this Auction Agent Agreement:
(a) Words importing the singular number shall include the plural
number and vice versa.
(b) The captions and headings herein are solely for convenience of
reference and shall not constitute a part of this Auction Agent Agreement
nor shall they affect its meaning, construction or effect.
(c) The words "hereof," "herein," "hereto" and other words of similar
import refer to this Auction Agent Agreement as a whole.
(d) All references herein to a particular time of day shall be to New
York City time.
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(e) The rights and duties of the Indenture Trustee, the Auction Agent
and the Issuer under this Auction Agent Agreement shall apply to each
Series of the Notes, but separately in each case. References to "Notes"
shall, unless the context clearly contemplates a reference to all the
Notes, be deemed to refer only to a particular Series of Notes.
Section 2. The Auction.
2.1. Interest Rate on Notes; Incorporation by Reference of Auction
Procedures and Settlement Procedures.
(a) During the Initial Period, each of the Series A1-1 Notes, the
Series A1-2 Notes, the Series A1-3 Notes and the Series A1-4 Notes shall
bear interest at the Initial Rate for such Series. Each of the Series A1-5
Notes, Series A1-6 Notes, Series A1-7 Notes, Series A1-8 Notes, Series A1-9
Notes, Series A1-10 Notes, Series A1-11 Notes, Series A1-12 Notes, Series
A1-13 Notes, Series B1-1 Notes and Series B1-2 Notes shall bear interest at
the Auction Note Interest Rate in effect for the Auction Period
corresponding to each of the Series A-5 Notes, Series A-6 Notes, Series A-7
Notes, Series A-8 Notes, Series A-9 Notes, Series A-10 Notes, Series A-11
Notes, Series A-12 Notes, Series A-13 Notes, Series B-1 Notes and Series
B-2 Notes, respectively, as of the Exchange Date. Otherwise, the Notes
shall bear interest at the Auction Note Interest Rate based on an Interest
Period that shall be an Auction Period. The Auction Note Interest Rate on
each Series of the Notes for each Auction Period shall be the least of (i)
the Net Loan Rate, (ii) the Auction Rate determined in accordance with the
Auction Procedures, and (iii) the Maximum Rate. Pursuant to Section 2.02(e)
of Appendix A to the Fourth Supplement, the Issuer has duly appointed
Deutsche Bank Trust Company Americas as Auction Agent for purposes of the
Auction Procedures and to perform such other obligations and duties as are
herein set forth. Deutsche Bank Trust Company Americas hereby accepts such
appointment and agrees that, on each Auction Date, it shall follow the
procedures set forth in this Section 2 and the Auction Procedures for the
purpose of, among other things, determining the Auction Rate, and
ultimately the Auction Note Interest Rate for each Series of the Notes for
each Auction Period other than the Initial Period, if any, applicable to
such Series. Each periodic operation of such procedures is hereinafter
referred to as an "Auction."
(b) All of the provisions contained in the Auction Procedures and the
Settlement Procedures are incorporated herein by reference in their
entirety and shall be deemed to be a part hereof to the same extent as if
such provisions were fully set forth herein.
2.2. Preparation of Each Auction; Maintenance of Existing Owner
Registry.
(a) A list of Broker-Dealers (showing ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. as the
initial Broker-Dealer for Series 2002A1-1 Notes, Series 2002A1-2 Notes,
Series 2002A1-3 Notes, Series 2002A1-4 Notes, Series 2002A1-5 Notes, Series
2002A1-6 Notes, Series 2002A1-7 Notes, Series 2002A1-8 Notes, Series
2002A1-9 Notes, Series 2002A1-10 Notes, Series 2002A1-11 Notes, Series
2002B1-1 Notes, and
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Series 2002B1-2 Notes, and showing ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. as the initial
Broker-Dealer for Series 2002A1-12 Notes and Series 2002A1-13 Notes) is
attached as Exhibit A to this Auction Agent Agreement. Not later than seven
days prior to any Auction Date for which any change in such list of
Broker-Dealers is to be effective, the Indenture Trustee, at the direction
of an Authorized Issuer Officer, will notify the Auction Agent in writing
of such change and, if any such change is the addition of a Broker-Dealer
to such list, shall cause to be delivered to the Auction Agent for
execution by the Auction Agent a Broker-Dealer Agreement manually signed by
such Broker-Dealer. The Auction Agent shall have entered into a
Broker-Dealer Agreement with each Broker-Dealer prior to the participation
of any such Broker-Dealer in any Auction.
(b) In the event that any day that is scheduled to be an Auction Date
shall be changed after the Auction Agent shall have given the notice of
such Auction Date pursuant to clause (vii) of paragraph (a) of the
Settlement Procedures, the Auction Agent, by such means as the Auction
Agent deems practicable, shall give notice of such change to the
Broker-Dealers not later than the earlier of 9:15 a.m. on the new Auction
Date and 9:15 a.m. on the old Auction Date.
(c) (i) The Auction Agent shall maintain a current registry of Persons
that are Broker-Dealers, compiled initially on the Closing Date as
described below, and that hold Notes, for purposes of dealing with the
Auction Agent in connection with an Auction (such registry being
herein called the "Existing Owner Registry"). Such Persons shall
constitute the "Existing Owners" for purposes of dealing with the
Auction Agent in connection with an Auction. The Auction Agent shall
indicate in the Existing Owner Registry for each Existing Owner the
identity of the Broker-Dealer that submitted the most recent Order in
any Auction that resulted in such Existing Owner continuing to hold or
purchasing the Notes. Pursuant to the Broker-Dealer Agreements,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., as the initial
Broker-Dealers, have agreed to provide to the Auction Agent on the
Closing Date the names and addresses of the Persons who are to be
initially listed on the Existing Owner Registry as constituting the
initial Existing Owners of Notes of the applicable Series for purposes
of dealing with the Auction Agent in connection with an Auction. The
Auction Agent may rely upon, as evidence of the identities of the
Existing Owners, such lists, the results of each Auction and notices
from any Existing Owner, Participant of any Existing Owner or
Broker-Dealer of any Existing Owner as described in Section
2.2(c)(iii) hereof.
(ii) The Indenture Trustee shall notify the Auction Agent in
writing when any notice of redemption of Notes is sent to the
Securities Depository as the Holder of Notes not later than 11:00 a.m.
on the date such notice is sent. Such notice with respect to a
redemption shall be substantially in the form of Exhibit C hereto. In
the event the Auction Agent receives from the Indenture Trustee
written notice of any partial redemption of any Notes, the Auction
Agent shall request the Securities Depository to notify the Auction
Agent of the Participants whose Notes have been called for redemption
and the person or department at such Participant to contact regarding
such redemption and, within two Business
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Days after the receipt by the Auction Agent of such information, the
Auction Agent shall request each Participant to disclose to the
Auction Agent (upon selection by such Participant of the Existing
Owners whose Notes are to be redeemed) the aggregate principal amount
of such Notes of each such Existing Owner, if any, that are to be
redeemed. In the absence of receiving any such information with
respect to any Existing Owner from such Existing Owner's Participant
or otherwise, the Auction Agent may continue to treat such Existing
Owner as the beneficial owner of the principal amount of Notes shown
in the Existing Owner Registry.
(iii) The Auction Agent shall be required to register in the
Existing Owner Registry a transfer of Notes from an Existing Owner to
another Person only if such transfer is made to a Person through a
Broker-Dealer and if (A) such transfer is pursuant to an Auction or
(B) the Auction Agent has been notified in writing (1) in a notice
substantially in the form of a Notice of Transfer by such Existing
Owner, by the Participant of such Existing Owner or by the
Broker-Dealer of such Existing Owner of such transfer, or (2) in a
notice substantially in the form of a Notice of Failure to Deliver or
Make Payment by the Broker-Dealer of any Person that purchased or sold
Notes in an Auction of the failure of such Notes to be transferred as
a result of the Auction. The Auction Agent is not required to accept
any Notice of Transfer or Notice of Failure to Deliver or Make Payment
delivered prior to an Auction unless it is received by the Auction
Agent by 3:00 p.m. on the Business Day next preceding the applicable
Auction Date.
(d) The Auction Agent may request that the Broker-Dealers, as set
forth in the Broker-Dealer Agreements, provide the Auction Agent with the
aggregate principal amount of Notes held by such Broker-Dealers for
purposes of the Existing Owner Registry. Except as permitted by Section
2.10 hereof, the Auction Agent shall keep confidential any such information
and shall not disclose any such information so provided to any Person other
than the relevant Broker-Dealer, the Issuer and the Indenture Trustee,
provided that the Auction Agent reserves the right to disclose any such
information if it is advised by its counsel that its failure to do so would
be unlawful or if failure to do so would expose the Auction Agent to loss,
liability, claim or damages for which the Auction Agent shall not
previously have been adequately indemnified.
(e) The Auction Agent shall send by telecopy or other means a copy of
any Notice of Notes Outstanding received from the Indenture Trustee to each
Broker-Dealer in accordance with Section 4.3 of the applicable
Broker-Dealer Agreement.
2.3. All Hold Rate, Maximum Rate, Net Loan Rate, Applicable LIBOR
Rate.
(a) On each Auction Date, the Auction Agent shall determine the All
Hold Rate, the Maximum Rate and the Applicable LIBOR Rate. The components
of the Net Loan Rate with respect to each Auction Date shall be determined
by the Administrator and communicated in writing to the Auction Agent in
accordance with the Fourth Supplement. Not later than 9:30 a.m. on each
Auction Date, the Auction Agent shall notify the Indenture Trustee and the
Broker-Dealers of the All Hold Rate, the Maximum
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Rate, the Net Loan Rate and the Applicable LIBOR Rate so determined. On the
Closing Date, the Issuer shall give written notice to the Auction Agent of
the initial ratings on the Notes by each Rating Agency substantially in the
form of the Notice of Ratings. Thereafter, if there is a change in any of
such ratings, the Issuer shall give written notice to the Auction Agent
substantially in the form of the Notice of Ratings within three Business
Days of its receipt of notice of such change, but not later than the close
of business on the Business Day immediately preceding an Auction Date if
the Issuer has received written notice of such change in a rating or
ratings prior to 12:00 noon on such Business Day, and the Auction Agent
shall take into account such change in rating or ratings for purposes
hereof and any Auction so long as such Notice of Ratings is received by the
Auction Agent no later than the close of business on such Business Day. In
determining the Maximum Rate and All-Hold Rate on any Auction Date, the
Auction Agent shall be entitled to rely on the Applicable LIBOR Rate of
which it has most recently received notice.
(b) (i) If, on any Auction Date for an Auction Period, an Auction is
not held for any reason, then the Auction Note Interest Rate for the
next succeeding Auction Period shall be the lesser of the Net Loan
Rate and the Maximum Rate.
(ii) If the ownership of the Notes is no longer maintained in
Book-entry Form by the Securities Depository, no further Auctions
shall be held and the Auction Note Interest Rate for each Interest
Period commencing after the delivery of certificated Notes pursuant to
Section 2.01(c) of the Fourth Supplement shall equal the lesser of (A)
the applicable Maximum Rate and (B) the Net Loan Rate in effect for
such Interest Period as determined by the Indenture Trustee on the
Business Day immediately preceding the first day of such subsequent
Interest Period.
(iii) If a Payment Default shall have occurred with respect to a
Series of Notes, the Auction Note Interest Rate with respect to such
Series for each Interest Period commencing on or immediately after the
occurrence of such Payment Default, and for each Interest Period
thereafter, to and including the Interest Period, if any, during
which, or commencing less than two Business Days after, such Payment
Default is cured, shall equal the Non-Payment Rate, as determined by
the Indenture Trustee on the first day of such Interest Period as
provided in Appendix A to the Fourth Supplement. The Interest Rate for
each Interest Period commencing at least two Business Days after any
cure or waiver of a Payment Default shall be determined through
implementation of the Auction Procedures.
2.4. Auction Schedule. The Auction Agent shall conduct Auctions for
the Notes on the Auction Date in accordance with the schedule set forth below.
Such schedule may be changed by the Auction Agent with the consent of the
Indenture Trustee and the Market Agent, which consents are not to be
unreasonably withheld or delayed. Notice of such a change must be given prior to
the close of business on the Business Day preceding the first Auction Date on
which such change shall be effective.
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Time Event
By 9:30 a.m. Auction Agent advises the Indenture Trustee and
the Broker-Dealers of the Maximum Rate, the Net
Loan Rate, the All Hold Rate, and the Applicable
LIBOR Rate to be used in determining the Auction
Rate under the Auction Procedures and the Auction
Agent Agreement.
9:30 a.m.-1:00 p.m. Auction Agent assembles information communicated
to it by Broker-Dealers as provided in the Auction
Procedures. Submission Deadline is 1:00 p.m.
Not earlier than 1:00 p.m. Auction Agent makes determinations pursuant to
Section 2.02(a)(iii) of Appendix A to the Fourth
Supplement.
Not later than 3:00 p.m. Auction Agent advises the Indenture Trustee and
the Broker-Dealers of the results of the Auction
as provided in Section 2.02(a)(iii)(B) and (C) of
Appendix A to the Fourth Supplement. Submitted
Bids and Submitted Sell Orders are accepted and
rejected in whole or in part and principal amounts
of Notes are allocated as provided in the Auction
Procedures. Auction Agent gives notice of Auction
results as set forth in Section 2.4(a) of the
Broker-Dealer Agreement.
The Auction Agent shall follow the notification procedures set forth in
paragraph (a) of the Settlement Procedures.
2.5. Changes in Auction Periods or Auction Date.
(a) Changes in Auction Period or Periods.
(i) The Auction Agent shall deliver any notice delivered to it
pursuant to Section 2.02(g)(i) of Appendix A to the Fourth Supplement
to the Existing Owners within two Business Days of its receipt
thereof.
(ii) The Auction Agent shall deliver any Issuer Certificate
delivered to it pursuant to Section 2.02(g)(iii) of Appendix A to the
Fourth Supplement to the Broker-Dealers not later than 3:00 p.m. on
the last Business Day preceding the next Auction Date by telecopy or
similar means.
(iii) If, after delivery to the Auction Agent of the notice
referred to in Section 2.02(g)(i) of Appendix A to the Fourth
Supplement, the Auction Agent
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fails to receive the Issuer Certificate and the Market Agent consent
referred to in Section 2.02(g)(iii) of Appendix A to the Fourth
Supplement by 11:00 a.m. on the last Business Day preceding the next
Auction Date, the Auction Agent shall deliver a notice of such failure
in substantially the form of Exhibit G hereto to the Broker-Dealers
not later than 3:00 p.m. on such Business Day by telecopy or other
similar means.
(iv) If, after delivery to the Auction Agent of the notice
referred to in the Section 2.02(g)(i) of Appendix A to the Fourth
Supplement and the certificate referred to in Section 2.02(g)(iii) of
Appendix A to the Fourth Supplement, Sufficient Bids are not received
by the Auction Agent by the Submission Deadline, the Auction Agent
shall notify the Broker-Dealers not later than 3:00 p.m. on such
Auction Date by telephone confirmed in writing in substantially the
form of Exhibit H hereto the next Business Day.
(b) Changes in Auction Date. The Auction Agent shall deliver any
notice delivered to it pursuant to Section 2.02(h) of Appendix A to the
Fourth Supplement to the Broker-Dealers within three Business Days of its
receipt thereof.
2.6. Notice of Fee Rate Change. If the Broker-Dealer Fee Rate is
changed pursuant to the provisions of Section 6.5(b) hereof, the Auction Agent
shall deliver a Notice of Fee Rate Change (i) to the Indenture Trustee with
respect to a change in the Broker-Dealer Fee Rate and (ii) to the Broker-Dealers
with respect to a change in the Broker-Dealer Fee Rate, in each case within two
Business Days of such change.
2.7. Notices to Existing Owners. The Auction Agent shall be entitled
to rely upon the address of each Broker-Dealer as provided in Section 4.3 of the
applicable Broker-Dealer Agreement in connection with any notice to each
Broker-Dealer, as an Existing Owner, required to be given by the Auction Agent.
2.8. Payment Default.
(a) After delivery by the Indenture Trustee to the Auction Agent of a
notice that a Payment Default shall have occurred, the Auction Agent shall,
on the Business Day following its receipt of the same, deliver a Notice of
Payment Default to the Broker-Dealers by telecopy or other similar means.
(b) The Auction Agent shall deliver a copy of any notice received by
it from the Indenture Trustee to the effect that a Payment Default has been
cured to the Broker-Dealers on the Business Day following its receipt of
the same by telecopy or other similar means.
2.9. Broker-Dealers.
(a) If the Auction Agent is provided with a copy of a Broker-Dealer
Agreement, which has been manually signed, with any Person listed on
Exhibit A hereto to which the Indenture Trustee, at the direction of an
Authorized Issuer Officer, shall have consented, it shall enter into such
Broker-Dealer Agreement with such Person. The
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Issuer hereby directs the Indenture Trustee to consent to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
& Co. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. as the initial Broker-Dealers.
(b) The Auction Agent may, at the written direction of an Authorized
Issuer Officer and with the approval of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. and ▇▇▇▇▇▇▇
▇▇▇▇▇ Barney Inc., so long as ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. and ▇▇▇▇▇▇▇ ▇▇▇▇▇
Barney Inc. are acting as Broker-Dealers, enter into a Broker-Dealer
Agreement with any other Person who requests to be selected to act as a
Broker-Dealer. The Auction Agent shall have entered into a Broker-Dealer
Agreement with each Broker-Dealer prior to the participation of any such
Broker-Dealer in any Auction.
(c) The Auction Agent shall terminate any Broker-Dealer Agreement as
set forth therein at the direction of an Authorized Issuer Officer.
2.10. Access to and Maintenance of Auction Records. The Auction Agent
shall afford to the Indenture Trustee, the Issuer and their respective agents,
independent public accountants and counsel access, at reasonable times during
normal business hours, to review and make extracts or copies (at no cost to the
Auction Agent) of all books, records, documents and other information concerning
the conduct and results of Auctions, provided that any such agent, accountant or
counsel shall furnish the Auction Agent with a letter from the Indenture Trustee
or the Issuer requesting that the Auction Agent afford such Person access. For
purposes of this Section 2.10, the Broker-Dealers shall not be considered to be
agents of the Indenture Trustee or the Issuer. The Auction Agent shall maintain
records relating to any Auction for a period of two years after such Auction (or
for such longer period requested in writing by the Indenture Trustee or the
Issuer, not to exceed four years after each Auction), and such records shall, in
reasonable detail, accurately and fairly reflect the actions taken by the
Auction Agent hereunder. At the end of such period, the Auction Agent shall
deliver such records to the Indenture Trustee, if so requested in writing. The
Indenture Trustee and the Issuer agree to keep any information regarding the
conduct and results of the Auctions, including, without limitation, information
regarding customers of any Broker-Dealer, received from the Auction Agent in
connection with this Auction Agent Agreement confidential and shall not disclose
such information or permit the disclosure of such information without the prior
written consent of the applicable Broker-Dealer to anyone except such agent,
accountant or counsel engaged to audit or review the results of Auctions as
permitted by this Section 2.10. Any such agent, accountant or counsel, before
having access to such information, shall agree to keep such information
confidential and not to disclose such information or permit disclosure of such
information without the prior written consent of the applicable Broker-Dealer,
except as may otherwise be required by law.
10
Section 3.Term of Agreement.
(a) This Auction Agent Agreement shall terminate on the earlier to
occur of (i) the satisfaction and discharge of the Fourth Supplement with
respect to the Notes or this Auction Agent Agreement and (ii) the date on
which this Auction Agent Agreement is terminated in accordance with this
Section 3. The Indenture Trustee may terminate this Auction Agent Agreement
in accordance with Section 2.02(e)(i) of Appendix A to the Fourth
Supplement. The Auction Agent may terminate this Auction Agent Agreement
upon written notice to the Indenture Trustee, the Issuer and each
Broker-Dealer on the date specified in such notice, which date shall be no
earlier than 90 days after the date of delivery of such notice.
Notwithstanding the foregoing, the provisions of Section 2 hereof shall
terminate upon the delivery of certificates representing Notes pursuant to
the Fourth Supplement. Notwithstanding the foregoing, the Auction Agent may
terminate this Agreement without further notice if, within 25 days after
notifying in writing the Indenture Trustee, the Issuer and each
Broker-Dealer that it has not received payment of any Auction Agent Fee due
it in accordance with the terms hereof, the Auction Agent does not receive
such payment. Any resignation of the Auction Agent or termination of this
Auction Agent Agreement, other than as described in the preceding sentence
of this paragraph, shall not become effective until a successor Auction
Agent has been appointed and acceptance of such appointment by such
successor Auction Agent. The Issuer and the Indenture Trustee agree to
diligently proceed to appoint a successor Auction Agent. However, if a
successor Auction Agent shall not have been appointed within 60 days from
the date of such notice of resignation, the resigning Auction Agent may
petition any court of competent jurisdiction for the appointment of a
successor Auction Agent.
(b) Except as otherwise provided in this Section 3(b), the respective
rights and duties of the Indenture Trustee, the Issuer and the Auction
Agent under this Auction Agent Agreement shall cease upon termination of
this Auction Agent Agreement. The Indenture Trustee's representations and
warranties to the Auction Agent under Section 5 hereof, the Issuer's
obligations to the Auction Agent under Section 6.4 hereof and to the
Broker-Dealers under Section 6.5 hereof, and the Auction Agent's
obligations under Section 2.10 hereof shall survive the termination of this
Auction Agent Agreement subject to Section 4 hereof. Upon termination of
this Auction Agent Agreement, the Auction Agent shall, upon written
request, promptly deliver to the Indenture Trustee copies of all books and
records maintained by it with respect to Notes in connection with its
duties hereunder.
Section 4. Indenture Trustee. All privileges, rights and immunities given
to the Indenture Trustee in the Fourth Supplement are hereby extended to and
applicable to the Indenture Trustee's obligations hereunder.
Section 5. Representations and Warranties of the Indenture Trustee. The
Indenture Trustee hereby represents and warrants to the Auction Agent and the
Issuer as follows:
5.1. The Indenture Trustee (i) has been duly incorporated and is
validly existing and in good standing as a banking corporation under the laws of
Ohio, and (ii) has all
11
necessary authority, approvals, consents (whether from the Issuer or otherwise)
to enter into and perform its obligations under this Auction Agent Agreement.
This Auction Agent Agreement has been duly and validly authorized, executed and
delivered by the Indenture Trustee and constitutes the legal, valid, binding and
enforceable obligation of the Indenture Trustee.
5.2 Neither the execution, delivery and performance of this Auction
Agent Agreement, the consummation of the transactions contemplated hereby nor
the fulfillment of or compliance with the terms and conditions of this Auction
Agent Agreement will conflict with, violate or result in a breach of, the terms,
conditions or provisions of, or constitute a default under, any law or
regulation, any order or decree of any court or public authority having
jurisdiction over the Indenture Trustee, or any mortgage, indenture, contract,
agreement or undertaking to which the Indenture Trustee is a party or by which
it is bound, or the organizational documents pursuant to which the Indenture
Trustee has been created and under which it is operating.
5.3 All approvals, consents and orders of any governmental authority,
legislative body, board, agency or commission having jurisdiction over the
Indenture Trustee that would constitute a condition precedent to or the absence
of which would materially adversely affect the due performance by the Indenture
Trustee of its obligations under this Auction Agent Agreement have been
obtained.
Section 6. The Auction Agent.
6.1 Duties and Responsibilities.
(a) The Auction Agent is acting solely as agent of the Issuer and owes
no fiduciary duties to any Person by reason of this Auction Agent
Agreement. The Auction Agent undertakes to perform such duties and only
such duties as are specifically set forth in this Auction Agent Agreement,
and no implied covenants or obligations shall be read into this Auction
Agent Agreement by means of the provisions of the Fourth Supplement or
otherwise against the Auction Agent.
(b) In the absence of bad faith or negligence on its part, the Auction
Agent shall not be liable for any action taken, suffered or omitted or for
any error of judgment made by it in the performance of its duties under
this Auction Agent Agreement. The Auction Agent shall not be liable for any
error of judgment made in good faith unless the Auction Agent shall have
been negligent in ascertaining the pertinent facts.
(c) The Auction Agent shall not agree to any amendment to a
Broker-Dealer Agreement without the prior written consent of the Issuer,
which consent shall not be unreasonably withheld.
12
6.2 Rights of the Auction Agent.
(a) The Auction Agent may rely and shall be protected in acting or
refraining from acting upon any communication authorized hereby and upon
any written instruction, notice, request, direction, consent, report,
certificate, form of note certificate or other instrument, paper or
document believed by it to be genuine. The Auction Agent shall not be
liable for acting upon any telephone communication authorized hereby that
the Auction Agent believes in good faith to have been given by the Issuer,
the Indenture Trustee or by a Broker-Dealer. The Auction Agent may record
telephone communications with the Issuer, the Indenture Trustee or with
Broker-Dealers or with any of the foregoing.
(b) The Auction Agent may consult with counsel of its choice, and the
advice or opinion 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, attorneys, nominees or
custodians and shall not be responsible for any misconduct or negligence on
the part of any agent or attorney appointed by it with due care hereunder.
6.3 Auction Agent's Disclaimer. The Auction Agent makes no
representation as to the correctness of the recitals in this Auction Agent
Agreement or the Broker-Dealer Agreement with respect to other parties thereto
or the validity or adequacy of the Notes.
6.4 Compensation, Remedies and Indemnification.
(a) With respect to each Series of the Notes, not later than 12:00
noon on each Payment Date following the Interest Period relating to such
Series of Notes, when such Interest Period is shorter than six months, or
on the last Business Day of each calendar quarter, when the Interest Period
relating to such Series of Notes is six months or longer, the Issuer shall
pay to the Auction Agent, solely from moneys available therefor in the
Revenue Fund, a fee (the "Auction Agent Fee") in cash equal to the product
of (i) 0.01% times (ii) a fraction, the numerator of which is the number of
days since the later of the Closing Date or the date the Auction Agent Fee
was last paid and the denominator of which is 360, times (iii) the
aggregate principal amount of Notes of such Series outstanding since the
later of the Closing Date or the date the Auction Agent Fee was last paid.
The Auction Agent shall advise the Issuer of the amount referred to in the
preceding sentence not later than 4:00 p.m. at least two Business Days
preceding such Payment Date.
(b) The Indenture Trustee shall reimburse the Auction Agent upon its
request for all reasonable expenses, disbursements and advances incurred or
made by the Auction
13
Agent in accordance with any provision of this Auction Agent Agreement or
the Broker-Dealer Agreements (including the reasonable compensation and
expenses and disbursements of its agents and counsel) from amounts
available therefor in the Revenue Fund. To the extent permitted by law and
limited to amounts in the Trust Estate created by the Indenture, the Issuer
shall indemnify and hold harmless the Auction Agent for and against any
loss, liability or expense incurred without negligence or willful
misconduct on the Auction Agent's part, arising out of or in connection
with the acceptance or administration of its agency under this Auction
Agent Agreement and the Broker-Dealer Agreements, including the reasonable
costs and expenses (including the reasonable fees and expenses of its
counsel) of defending itself against any such claim or liability in
connection with its exercise or performance of any of its duties hereunder
and thereunder and of enforcing this indemnification provision; provided
that the Issuer shall not indemnify the Auction Agent pursuant to this
Section 6.4(b) for any fees and expenses incurred by the Auction Agent in
the normal course of performing its duties hereunder and under the
Broker-Dealer Agreements, such fees and expenses being payable as provided
in Section 6.4(a) above.
(c) The provisions of Sections 6.4(a) shall be subject to fee
arrangements between the parties in effect from time to time.
6.5 Compensation of the Broker-Dealers.
(a) With respect to each Series of the Notes, not later than 12:00
noon on each Payment Date following the Interest Period relating to such
Series of Notes, when such Interest Period is shorter than six months, or
on the last Business Day of each calendar quarter, when the Interest Period
relating to such Series of Notes is six months or longer, the Issuer,
pursuant to the Fourth Supplement, shall pay to the Auction Agent, solely
from moneys available therefor in the Revenue Fund, a fee (the
"Broker-Dealer Fee") in cash equal to the product of (i) the Broker-Dealer
Fee Rate times (ii) a fraction, the numerator of which is the number of
days since the later of the Closing Date or the date the Broker-Dealer Fee
was last paid and the denominator of which is 360, times (iii) the
aggregate principal amount of Notes of such Series outstanding since the
later of the Closing Date or the date the Broker-Dealer Fee was last paid.
The Auction Agent shall advise the Issuer of the amount referred to in the
preceding sentence not later than 4:00 p.m. at least two Business Days
preceding such Payment Date. The Auction Agent shall apply such monies as
set forth in Section 2.5 of the Broker-Dealer Agreements.
(b) After retaining an amount equal to the Auction Agent Fee as
provided in Section 6.4 above, the Auction Agent shall pay the
Broker-Dealer Fee as provided in Section 6.5(a) above solely out of amounts
received by the Auction Agent pursuant to Appendix A to the Fourth
Supplement. The Auction Agent shall advise the Issuer at least annually, at
the request of an Authorized Issuer Officer, of the prevailing rate. The
Broker-Dealer Fee Rate may be adjusted from time to time with the approval
of an Authorized Issuer Officer upon a written request of the Auction Agent
or a Broker-Dealer, delivered to the Indenture Trustee and the Issuer. The
initial Broker-Dealer Fee Rate shall be 0.25% per annum. If the
Broker-Dealer Fee Rate is changed pursuant to the terms hereof, the Auction
Agent shall notify the Indenture Trustee thereof as provided in
14
Section 2.6 hereof. Any changes in the Broker-Dealer Fee Rate shall be
effective on the Auction Date next succeeding such change.
Section 7. Miscellaneous.
7.1 Governing Law. This Auction Agent Agreement shall be governed
by and construed in accordance with the laws of the State of New York applicable
to agreements made and to be performed in such state.
7.2 Communications. Except for (i) communications authorized to be
made by telephone pursuant to this Auction Agent Agreement or the Auction
Procedures and (ii) communications in connection with Auctions (other than those
expressly required to be in writing), all notices, requests and other
communications to any party hereunder shall be in writing (including facsimile
or similar writing) and shall be given to such party addressed to it at its
address, or facsimile number set below:
If to the Market Agent: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Syndicate Desk
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Auction Agent: DEUTSCHE BANK TRUST COMPANY AMERICAS
▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the initial Broker-Dealers: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Syndicate Desk
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Student Loan Group
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Indenture Trustee: FIFTH THIRD BANK
Corporate Trust Administration
MD 10AT60
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Issuer: EDUCATION FUNDING CAPITAL TRUST-I
c/o Fifth Third Bank
Corporate Trust Administration
MD 10AT60
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Wilmington Trust Company
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address, telephone or facsimile number as such party may hereafter
specify for such purpose by notice in writing to the other parties. Each such
notice, request or communication shall be effective when delivered at the
address specified herein. Communications shall be given on behalf of the
Indenture Trustee by an Authorized Trustee Representative, on behalf of the
Auction Agent by an Authorized Auction Agent Officer and on behalf of the Issuer
by an Authorized Issuer Officer.
7.3 Entire Agreement. This Auction Agent Agreement contains the entire
agreement between the parties relating to the subject matter hereof, and there
are no other representations, endorsements, promises, agreements or
understandings, oral, written or inferred, between the parties relating to the
subject matter hereof.
7.4 Benefits. Nothing herein, express or implied, shall give to any
Person, other than the Indenture Trustee, acting on behalf of the beneficial
owners of the Notes, the Auction Agent, the Issuer and their respective
successors and assigns, any benefit of any legal or equitable right, remedy or
claim hereunder.
7.5 Amendment; Waiver.
(a) This Auction Agent Agreement shall not be deemed or construed to
be modified, amended, rescinded, canceled or waived, in whole or in part,
except by a written instrument signed by duly authorized representatives of
the parties hereto.
(b) The Indenture Trustee and the Issuer shall not enter into or
approve any amendment of or supplement to the Fourth Supplement that
materially affects the Auction Agent's duties or obligations under the
Fourth Supplement without obtaining the
16
prior written consent of the Auction Agent. The Indenture Trustee shall
promptly notify the Auction Agent of any amendment of or supplement to the
Fourth Supplement, and shall provide a copy thereof to the Auction Agent
upon request.
(c) Failure of a party hereto to exercise any right or remedy
hereunder in the event of a breach hereof by any other party shall not
constitute a waiver of any such right or remedy with respect to any
subsequent breach.
7.6 Successors and Assigns. This Auction Agent Agreement shall be
binding upon, inure to the benefit of and be enforceable by the respective
successors and assigns of each of the Indenture Trustee, the Issuer and the
Auction Agent. This Auction Agent Agreement may not be assigned by any party
hereto absent the prior written consent of the other parties hereto, which
consents shall not be unreasonably withheld.
7.7 Severability. If any clause, provision or section hereof shall be
ruled invalid or unenforceable by any court of competent jurisdiction, the
invalidity or unenforceability of such clause, provision or section shall not
affect any of the remaining clauses, provisions or sections hereof.
7.8 Execution in Counterparts. This Auction Agent Agreement may be
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.
[remainder of this page intentionally left blank]
17
IN WITNESS WHEREOF, the parties hereto have caused this Auction Agent
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the date first above written.
EDUCATION FUNDING CAPITAL TRUST-I,
as Issuer, by Fifth Third Bank, not
in its individual capacity, but
solely as Co-Owner Trustee on behalf
of the Issuer
By:
---------------------------------
Title:
------------------------------
FIFTH THIRD BANK,
as Indenture Trustee
By:
---------------------------------
Title:
------------------------------
DEUTSCHE BANK TRUST COMPANY
AMERICAS, as Auction Agent
By:
---------------------------------
Title:
------------------------------
18
EXHIBIT A
TO AUCTION AGENT AGREEMENT
LIST OF INITIAL BROKER-DEALERS
Notes: Broker-Dealers:
------ ---------------
Series 2002A1-1 ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co.
Series 2002A1-2 ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co.
Series 2002A1-3 ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co.
Series 2002A1-4 ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co.
Series 2002A1-5 ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co.
Series 2002A1-6 ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co.
Series 2002A1-7 ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co.
Series 2002A1-8 ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co.
Series 2002A1-9 ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co.
Series 2002A1-10 ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co.
Series 2002A1-11 ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co.
Series 2002A1-12 ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
Series 2002A1-13 ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
Series 2002B1-1 ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co.
Series 2002B1-2 ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co.
A-1
EXHIBIT B
TO AUCTION AGENT AGREEMENT
NOTICE OF RATINGS
Education Funding Capital Trust-I
$_______ Education Loan Backed Notes consisting of Auction Rate
Education Loan Backed Notes, Series 2002A1-1 Notes, Series 2002A1-2
Notes, Series 2002A1-3 Notes, Series 2002A1-4 Notes, Series 2002A1-5
Notes, Series 2002A1-6 Notes, Series 2002A1-7 Notes, Series 2002A1-8
Notes, Series 2002A1-9 Notes, Series 2002A1-10 Notes, Series 2002A1-11
Notes, Series 2002A1-12 Notes, Series 2002A1-13 Notes (collectively,
the "Series 2002A1 Notes"), and Auction Rate Education Loan Backed
Notes, Series 2002B1-1 and Series 2002B1-2 (collectively, the "Series
2002B1 Notes")
NOTICE IS HEREBY GIVEN by Education Funding Capital Trust-I (the
"Issuer") to , as the auction agent (the "Auction Agent") pursuant to
------------
Section 2.3(a) of the Auction Agent Agreement, that as of the date of this
Notice:
1. The rating by Fitch Ratings on the captioned Series 2002A1 Notes
is [and such rating is ["AAA" or higher/lower than AAA]]*;
------
2. The rating by ▇▇▇▇▇'▇ Investors Services, Inc. on the captioned
Series 2002A1 Notes is [and such rating is ["Aaa" or
------
higher/lower than Aaa]]*;
3. The rating by Standard & Poor's on the captioned Series 2002A1
Notes is [and such rating is ["AAA" or higher/lower than
------
AAA]]*;
4. The rating by Fitch Ratings on the captioned Series 2002B1
Subordinate Notes is ["A" or higher/lower than A]]*.
------
5. The rating by ▇▇▇▇▇'▇ Investors Service, Inc. on the captioned
Series 2002B1 Notes is ["A3" or higher/lower than A3]]*;
------
and
6. The rating by Standard & Poor's on the captioned Series 2002B1
Subordinate Notes is ["A" or higher/lower than A]]*.
------
----------
* The information in the outer brackets will be used as applicable whenever (i)
the Fitch rating is not equal to AAA on the Series 2002A1 Notes and/or A on the
Series 2002B1 Notes,(ii) the ▇▇▇▇▇'▇ rating is not equal to Aaa on the Series
2002A1 Notes and/or A3 on the Series 2002B1 Notes, and/or (iii) the S&P rating
is not equal to AAA on the Series 2002A1 Notes and/or A on the Series2002B1
Notes.
B-1
The Auction Agent may rely on such ratings for all purposes of the Fourth
Supplement (as defined in the Auction Agent Agreement), including determination
of the Maximum Rate thereunder, from the date hereof until further notice from
the undersigned.
EDUCATION FUNDING CAPITAL TRUST-I
By:
---------------------------------
Title:
------------------------------
Date:
-------------------------------
B-2
EXHIBIT C
TO AUCTION AGENT AGREEMENT
NOTICE OF NOTES OUTSTANDING
EDUCATION FUNDING CAPITAL TRUST-I
AUCTION RATE EDUCATION LOAN BACKED NOTES
SERIES 2002[A1][B1]-[__]
NOTICE IS HEREBY GIVEN that $___________ aggregate principal amount of
Series 2002[A1][B1]-[__] Notes were outstanding at the close of business on the
immediately preceding Regular Record Date. Such aggregate principal amount of
Series 2002[A1][B1]-[__] Notes, less $___________ aggregate principal amount of
Series 2002[A1][B1]-[__] Notes to be redeemed by the Issuer pursuant to the
Fourth Supplement, for a net aggregate principal amount of Series
2002[A1][B1]-[__] Notes of $___________, will be available on the next Auction
scheduled to be held on .
----------------
Terms used herein have the meanings set forth in the Fourth Supplement
relating to the above-referenced issue.
FIFTH THIRD BANK, as Indenture Trustee
By:
---------------------------------------
Title:
------------------------------------
Date:
-------------------------------------
C-1
EXHIBIT D
TO AUCTION AGENT AGREEMENT
NOTICE OF FEE RATE CHANGE
EDUCATION FUNDING CAPITAL TRUST-I
AUCTION RATE EDUCATION LOAN BACKED NOTES
SERIES 2002A1-1, ▇▇-▇, ▇▇-▇, ▇▇-▇, ▇▇-▇, ▇▇-▇, ▇▇-▇, ▇▇-▇,
▇▇-▇, A1-10, A1-11, A1-12, A1-13, B1-1, and B1-2
NOTICE IS HEREBY GIVEN that the Broker-Dealer Fee Rate has been
changed in accordance with Section 6.5(b) of the Auction Agent Agreement. The
new Broker-Dealer Fee Rate shall be % per annum.
------
Terms used herein have the meanings set forth in the Fourth Supplement
relating to the above-referenced issue.
DEUTSCHE BANK TRUST COMPANY
AMERICAS, as Auction Agent
By:
----------------------------------------
Title:
-------------------------------------
Date:
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APPROVED:
EDUCATION FUNDING CAPITAL TRUST-I
By:
----------------------------
Title:
-------------------------
Date:
--------------------------
D-1
EXHIBIT E
TO AUCTION AGENT AGREEMENT
NOTICE OF A PAYMENT DEFAULT
EDUCATION FUNDING CAPITAL TRUST-I
AUCTION RATE EDUCATION LOAN BACKED NOTES
SERIES 2002A1-1, ▇▇-▇, ▇▇-▇, ▇▇-▇, ▇▇-▇, ▇▇-▇, ▇▇-▇, ▇▇-▇,
▇▇-▇, A1-10, A1-11, A1-12, A1-13, B1-1, and B1-2
NOTICE IS HEREBY GIVEN that a Payment Default has occurred and not
been cured with respect to the Series 2002[A1][B1]- Notes. Determination of
---
the Auction Note Interest Rate on the Notes pursuant to the Auction Procedures
will be suspended. The Auction Note Interest Rate on such Series of the Notes
for the Interest Period commencing on or immediately after such Payment Default,
and for each Interest Period thereafter, to and including the Interest Period,
if any, during which, or commencing less than two Business Days after, such
Payment Default is cured, will equal the Non-Payment Rate, as it is determined
by the Indenture Trustee on the first day of such Interest Period.
Terms used herein have the meanings set forth in the Fourth Supplement
relating to the above-referenced issue.
DEUTSCHE BANK TRUST COMPANY
AMERICAS, as Auction Agent
By:
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Title:
-------------------------------------
Date:
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E-1
EXHIBIT F
TO AUCTION AGENT AGREEMENT
SETTLEMENT PROCEDURES
If not otherwise defined below, capitalized terms used herein shall have
the meanings given such terms in Appendix A to the Fourth Supplement. These
Settlement Procedures apply separately to each Series of Auction Rate Notes.
(a) On each Auction Date, not later than 3:00 p.m., 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 Owner or
Potential Owner of:
(i) the Auction Note Interest Rate fixed for the next Interest
Period;
(ii) whether there were Sufficient Bids in such Auction;
(iii) if such Broker-Dealer (a "Seller's Broker-Dealer")
submitted Bids or Sell Orders on behalf of an Existing Owner, whether such Bid
or Sell Order was accepted or rejected, in whole or in part, and the principal
amount of Auction Rate Notes, if any, to be purchased or sold by such Existing
Owner;
(iv) if such Broker-Dealer (a "Buyer's Broker-Dealer") submitted
a Bid on behalf of a Potential Owner, whether such Bid was accepted or rejected,
in whole or in part, and the principal amount of Auction Rate Notes, if any, to
be purchased by such Potential Owner;
(v) if the aggregate amount of Auction Rate Notes to be sold by
all Existing Owners on whose behalf such Seller's Broker-Dealer submitted Bids
or Sell Orders exceeds the aggregate principal amount of Auction Rate Notes to
be purchased by all Potential Owners 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 Auction Rate Notes
and the principal amount of Auction Rate Notes to be purchased from one or more
Existing Owners on whose behalf such Seller's Broker-Dealer acted by one or more
Potential Owners on whose behalf each of such Buyer's Broker-Dealers acted;
(vi) if the principal amount of Auction Rate Notes to be
purchased by all Potential Owners on whose behalf such Buyer's Broker-Dealer
submitted a Bid exceeds the amount of Auction Rate Notes to be sold by all
Existing Owners on whose behalf such Seller's Broker-Dealer submitted a Bid or a
Sell Order, the name or names of one or more Seller's Broker-Dealers (and the
name of the Participant, if any, of each such Seller's Broker-Dealer) acting for
one or more sellers of such excess principal amount of Auction Rate Notes and
the principal amount of Auction Rate Notes to be sold to one or more Potential
Owners on whose
F-1
behalf such Buyer's Broker-Dealer acted by one or more Existing Owners on whose
behalf each of such Seller's Broker-Dealers acted;
(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 Owner or Potential Owner shall:
(i) advise each Existing Owner and Potential Owner 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 Owner 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 to such Buyer's Broker-Dealer
(or its Participant) through the Securities Depository the amount necessary to
purchase the principal amount of Auction Rate Notes to be purchased pursuant to
such Bid against receipt of such Auction Rate Notes;
(iii) in the case of a Broker-Dealer that is a Seller's
Broker-Dealer, instruct each Existing Owner 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 Owner's
Participant to deliver to such Seller's Broker-Dealer (or its Participant)
through the Securities Depository the principal amount of Auction Rate Notes to
be sold pursuant to such Order against payment therefor;
(iv) advise each Existing Owner on whose behalf such
Broker-Dealer submitted an Order and each Potential Owner on whose behalf such
Broker-Dealer submitted a Bid of the Auction Note Interest Rate for the next
Interest Period;
(v) advise each Existing Owner on whose behalf such Broker-Dealer
submitted an Order of the next Auction Date; and
(vi) advise each Potential Owner 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 Auction Rate Notes received by it
in connection with such Auction pursuant to paragraph (b)(iii) above among the
Potential Owners, if any, on whose behalf such Broker-Dealer submitted Bids, the
Existing Owners, if any, on whose behalf such Broker-Dealer submitted Bids or
Sell Orders in such Auction, and any Broker-Dealers identified to it by the
Auction Agent following such Auction pursuant to paragraph (a)(v) or (a)(vi)
above.
F-2
(d) On each Auction Date:
(i) each Potential Owner and Existing Owner 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 (A) pay through the
Securities Depository to the Participant of the Existing Holder delivering
Auction Rate Notes to such Broker-Dealer following such Auction pursuant to
paragraph (b)(ii) above the amount necessary to purchase such Auction Rate Notes
against receipt of such Auction Rate Notes and (B) deliver such Auction Rate
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 of the
Securities Depository shall instruct its Participant to pay through the
Securities Depository to a Seller's Broker-Dealer (or its Participant)
identified following such Auction pursuant to (a)(vi) above the amount necessary
to purchase Auction Rate Notes to be purchased pursuant to (b)(ii) above against
receipt of such Auction Rate Notes.
(e) On the Business Day following each Auction Date:
(i) each Participant for a Bidder in the Auction on such Auction
Date referred to in (d)(i) above shall instruct the 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 Owner selling Auction Rate Notes in an Auction fails to
deliver such Auction Rate Notes (by authorized book-entry), a Broker-Dealer may
deliver to the Potential Owner on behalf of which it submitted a Bid that was
accepted a principal amount of Auction Rate Notes that is less than the
principal amount of Auction Rate Notes that otherwise was to be purchased by
such Potential Owner. In such event, the principal amount of Auction Rate Notes
to be so delivered shall be determined solely by such Broker-Dealer. Delivery of
such lesser principal amount of Auction Rate Notes shall constitute good
delivery. Notwithstanding the foregoing terms of this paragraph (f), any
delivery or nondelivery of Auction Rate Notes that 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
F-3
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 shall have any
responsibility or liability with respect to the failure of a Potential Owner,
Existing Owner or their respective Broker-Dealer or Participant to take delivery
of or deliver, as the case may be, the principal amount of Auction Rate Notes or
to pay for the Auction Rate Notes purchased or sold pursuant to an Auction or
otherwise.
F-4
EXHIBIT G
TO AUCTION AGENT AGREEMENT
NOTICE OF CONTINUATION OF AUCTION PERIOD
EDUCATION FUNDING CAPITAL TRUST-I
AUCTION RATE EDUCATION LOAN BACKED NOTES
SERIES 2002A1-1, ▇▇-▇, ▇▇-▇, ▇▇-▇, ▇▇-▇, ▇▇-▇, ▇▇-▇, ▇▇-▇,
▇▇-▇, A1-10, A1-11, A1-12, A1-13, B1-1, and B1-2
NOTICE IS HEREBY GIVEN that a condition for the establishment of a
change in the length of one or more Auction Periods for the captioned Notes has
not been met. An Auction will therefor be held on the next Auction Date
(__________________) and the length of such Auction Period shall remain an
Auction Period of days.
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DEUTSCHE BANK TRUST COMPANY
AMERICAS, as Auction Agent
By:
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Title:
-------------------------------------
Date:
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G-1
EXHIBIT H
TO AUCTION AGENT AGREEMENT
NOTICE OF INTEREST RATE
EDUCATION FUNDING CAPITAL TRUST-I
AUCTION RATE EDUCATION LOAN BACKED NOTES
SERIES 2002A1-1, ▇▇-▇, ▇▇-▇, ▇▇-▇, ▇▇-▇, ▇▇-▇, ▇▇-▇, ▇▇-▇,
▇▇-▇, A1-10, A1-11, A1-12, A1-13, B1-1, and B1-2
NOTICE IS HEREBY GIVEN that Sufficient Bids necessary for the
establishment of a change in the length of one or more Auction Periods for the
captioned Notes have not been received. The Auction Note Interest Rate for the
Auction Period commencing on shall be the least of the Auction
---------------
Rate, the Net Loan Rate and the Maximum Rate, and such Auction Period shall
remain an Auction Period of days.
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DEUTSCHE BANK TRUST COMPANY
AMERICAS, as Auction Agent
By:
----------------------------------------
Title:
-------------------------------------
Date:
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H-1