EXHIBIT 10.11
EXECUTION COPY
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AUCTION AGENT AGREEMENT
by and among
EDUCATION FUNDING CAPITAL TRUST-II
as Issuer,
FIFTH THIRD BANK
as Indenture Trustee,
and
DEUTSCHE BANK TRUST COMPANY AMERICAS
as Auction Agent
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Dated as of April 1, 2003
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Relating to
Education Funding Capital Trust-II
$500,000,000 Education Loan Backed Notes
consisting of
Education Loan Backed Notes, Series A-4
Education Loan Backed Notes, Series A-5
Education Loan Backed Notes, Series A-6
Education Loan Backed Notes, Series A-7
Education Loan Backed Notes, Series A-8
Education Loan Backed Notes, Series B-1
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TABLE OF CONTENTS
Page
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SECTION 1. DEFINITIONS AND RULES OF CONSTRUCTION.......................................................... 1
1.1 Terms Defined by Reference to Indenture........................................................... 1
1.2 Terms Defined Herein.............................................................................. 1
1.3 Rules of Construction............................................................................. 3
SECTION 2. THE AUCTION.................................................................................... 3
2.1 Interest Rate on Auction Rate Notes; Incorporation by Reference of Auction Procedures and
Settlement Procedures............................................................................. 3
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...................................................... 9
SECTION 3. TERM OF AGREEMENT.............................................................................. 11
SECTION 4. INDENTURE TRUSTEE.............................................................................. 11
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE INDENTURE TRUSTEE........................................ 12
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................................................................................. 17
7.6 Successors and Assigns............................................................................ 17
7.7 Severability...................................................................................... 17
7.8 Execution in Counterparts......................................................................... 17
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Exhibits
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
- ii -
AUCTION AGENT AGREEMENT
THIS AUCTION AGENT AGREEMENT, dated as of April 1, 2003 (this "Auction
Agent Agreement"), is being entered into by and among EDUCATION FUNDING CAPITAL
TRUST-II, a Delaware statutory 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 $500,000,000 aggregate principal amount of its
Education Loan Backed Notes, in six series designated Education Loan Backed
Notes, Series A-4 (the "Series A-4 Notes"), Education Loan Backed Notes, Series
A-5 (the "Series A-5 Notes"), Education Loan Backed Notes, Series A-6 (the
"Series A-6 Notes"), Education Loan Backed Notes, Series A-7 (the "Series A-7
Notes"), Education Loan Backed Notes, Series A-8 (the "Series A-8 Notes"), and
Education Loan Backed Notes, Series B-1 (the "Series B-1 Notes")(the "Series B-1
Notes" and, together with the Series A-4 Notes, the Series A-5 Notes, the Series
A-6 Notes, the Series A-7 Notes and the Series A-8 Notes, the "Auction Rate
Notes"). The Auction Rate Notes are being issued under an Indenture of Trust
dated as of April 1, 2003 (the "Indenture"); and
WHEREAS, pursuant to Appendix B to the Indenture, 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 Indenture;
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 Indenture. Capitalized
terms used herein and not otherwise defined herein shall have the meanings given
such terms in the Indenture.
1.2 Terms Defined Herein. As used herein and in the
Settlement Procedures (as defined below), the following terms shall have the
following meanings, unless the context otherwise requires:
"Auction" shall have the meaning specified in Section 2.1
hereof.
"Auction Agent Fee" shall have meaning specified in Section
6.4(a) hereof.
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"Auction Procedures" shall mean the provisions that are set
forth in Section 2.02 of Appendix B to the Indenture.
"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 Co-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
Auction Rate 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 April 1, 2003 between the Auction Agent and each of
Citigroup Global Markets Inc. and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co.
"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.
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"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.
(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 Auction Rate Notes, but separately in each
case. References to "Auction Rate Notes" shall, unless the context
clearly contemplates a reference to all the Auction Rate Notes, be
deemed to refer only to a particular Series of Auction Rate Notes.
Section 2. The Auction.
2.1 Interest Rate on Auction Rate Notes; Incorporation by
Reference of Auction Procedures and Settlement Procedures.
(a) During the Initial Period, each Series of the Auction
Rate Notes shall bear interest at the Initial Rate for such Series.
Thereafter, the Auction Rate 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 Auction
Rate Notes for each Auction Period shall be the least of (i) the Net
Loan Rate, (ii) the Auction
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Rate determined in accordance with the Auction Procedures, and (iii) the
Maximum Rate. Pursuant to Section 2.02(e) of Appendix B to the
Indenture, 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 Auction Rate Notes for
each Auction Period other than 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 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 the Series A-4 Notes and Series A-5
Notes and Citigroup Global Markets Inc. as the initial Broker-Dealer for
the Series A-6 Notes, Series A-7 Notes, Series A-8 Notes and Series B-1
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 Auction
Rate 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
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any Auction that resulted in such Existing Owner continuing to
hold or purchasing the Auction Rate Notes. Pursuant to the
Broker-Dealer Agreements, Citigroup Global Markets Inc. and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co., 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 Auction Rate 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 Auction Rate
Notes is sent to the Securities Depository as the Holder of
Auction Rate 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 Auction Rate Notes, the
Auction Agent shall request the Securities Depository to notify
the Auction Agent of the Participants whose Auction Rate Notes
have been called for redemption and the person or department at
such Participant to contact regarding such redemption and,
within two Business 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 Auction Rate Notes
are to be redeemed) the aggregate principal amount of such
Auction Rate 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 Auction Rate Notes shown in the Existing
Owner Registry.
(iii) The Auction Agent shall be required to register
in the Existing Owner Registry a transfer of Auction Rate 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 Auction Rate Notes in an Auction of the failure of such
Auction Rate 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.
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(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 Auction Rate 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 Indenture. 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 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 Auction Rate 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 Auction Rate 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 1.01(g) of
the Indenture
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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 Auction Rate 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 B to the Indenture. 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 Auction Rate 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.
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 B to the
Indenture.
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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 B to the Indenture. Submitted Bids
and Submitted Sell Orders are accepted and
rejected in whole or in part and principal
amounts of Auction Rate 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 B to
the Indenture 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 B to the Indenture 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 B to the
Indenture, the Auction Agent fails to receive the Issuer
Certificate and the Market Agent consent referred to in Section
2.02(g)(iii) of Appendix B to the Indenture 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 B to
the Indenture and the certificate referred to in Section
2.02(g)(iii) of Appendix B to the Indenture, Sufficient Bids are
not received by the Auction Agent by the Submission Deadline,
the Auction Agent shall notify the Broker-Dealers not later than
3:00 p.m. 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 B to
the Indenture to the Broker-Dealers within three Business Days of its
receipt thereof.
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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
Issuer hereby directs the Indenture Trustee to consent to Citigroup
Global Markets Inc. and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. as the initial
Broker-Dealers.
(b) The Auction Agent may, at the written direction of an
Authorized Issuer Officer and with the approval of Citigroup Global
Markets Inc. and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co., so long as Citigroup Global
Markets Inc. and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co. 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
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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.
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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 Indenture
with respect to the Auction Rate 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 B to the Indenture. 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
Auction Rate Notes pursuant to the Indenture. 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 Auction
Rate Notes in connection with its duties hereunder.
Section 4. Indenture Trustee. All privileges, rights and immunities
given to the Indenture Trustee in the Indenture are hereby extended to and
applicable to the Indenture Trustee's obligations hereunder.
11
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 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 Indenture or otherwise against the Auction Agent.
(b) In the absence of bad faith or negligence on its part,
the Auction Agent shall not be liable for any action taken, suffered or
omitted or for any error of judgment made by it in the performance of
its duties under this Auction Agent Agreement. The Auction Agent shall
not be liable for any error of judgment made in good faith unless the
Auction Agent shall have been negligent in ascertaining the pertinent
facts.
(c) The Auction Agent shall not agree to any amendment to a
Broker-Dealer Agreement without the prior written consent of the Issuer,
which consent shall not be unreasonably withheld.
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 Auction Rate Notes.
6.4 Compensation, Remedies and Indemnification.
(a) With respect to each Series of the Auction Rate Notes,
not later than 12:00 noon on each Monthly Expense Payment Date, the
Issuer shall direct the Indenture Trustee pay to the Auction Agent,
pursuant to the Indenture and solely from moneys available therefor in
the Distribution Account or Collection Account, 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 Auction Rate 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 Monthly Expense 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 Distribution Account or Collection Account. 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 Auction Rate Notes,
not later than 12:00 noon on each Monthly Expense Payment Date, the
Issuer shall direct the Indenture Trustee pay to the Auction Agent,
pursuant to the Indenture and solely from moneys available therefor in
the Distribution Account or Collection Account, 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 Auction Rate 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 Monthly Expense
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 B to the
Indenture. The Auction Agent shall advise the Issuer at least annually,
at the request of an Authorized Issuer Officer, of the prevailing rate.
The Broker-Dealer Fee Rate may be adjusted from time to time with the
approval of an Authorized Issuer Officer upon a written request of the
Auction Agent or 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 Section 2.6
14
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: Citigroup Global Markets Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: _______________________
Telephone Number: ________________
Facsimile Number: ________________
If to the Auction Agent: Deutsche Bank Trust Company Americas
Corporate Trust & Agency Services
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone Number: ▇▇▇.▇▇▇.▇▇▇▇
Facsimile Number: 212.454.2030
If to the initial Broker-Dealers: Citigroup Global Markets Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: _______________________
Telephone Number: ________________
Facsimile Number: ________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Syndicate Desk
Telephone Number: ▇▇▇.▇▇▇.▇▇▇▇
Facsimile Number: 727.502.3625
15
If to the Indenture Trustee: Fifth Third Bank
MD 10AT60
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Telephone: ▇▇▇.▇▇▇.▇▇▇▇
Facsimile: 513.534.6785
If to the Issuer: Education Funding Capital Trust-II
c/o Fifth Third Bank
MD 10AT60
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Telephone: ▇▇▇.▇▇▇.▇▇▇▇
Facsimile: 513.534.6785
with a copy to: Wilmington Trust Company
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration
Telephone: ▇▇▇.▇▇▇.▇▇▇▇
Facsimile: 203.975.6299
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 Auction Rate Notes, the Auction Agent, the Issuer and
their respective successors and assigns, any benefit of any legal or equitable
right, remedy or claim hereunder.
16
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 Indenture that
materially affects the Auction Agent's duties or obligations under the
Indenture without obtaining the prior written consent of the Auction
Agent. The Indenture Trustee shall promptly notify the Auction Agent of
any amendment of or supplement to the Indenture, and shall provide a
copy thereof to the Auction Agent upon request.
(c) Failure of a party hereto to exercise any right or
remedy hereunder in the event of a breach hereof by any other party
shall not constitute a waiver of any such right or remedy with respect
to any subsequent breach.
7.6 Successors and Assigns. This Auction Agent Agreement
shall be binding upon, inure to the benefit of and be enforceable by the
respective successors and assigns of each of the 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; signatures begin
on next page]
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 written above.
EDUCATION FUNDING CAPITAL TRUST-II,
as Issuer, by Fifth Third Bank, not in
its individual capacity, but solely as
Co-Owner Trustee on behalf of the Issuer
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Title: Assistant Vice President
----------------------------------
FIFTH THIRD BANK, as Indenture Trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Title: Assistant Vice President
----------------------------------
DEUTSCHE BANK TRUST COMPANY
AMERICAS, as Auction Agent
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Title: VP
----------------------------------
EXHIBIT A
TO AUCTION AGENT AGREEMENT
LIST OF INITIAL BROKER-DEALERS
Notes: Broker-Dealers:
---------- -----------------------------
Series A-4 ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co.
Series A-5 ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co.
Series A-6 Citigroup Global Markets Inc.
Series A-7 Citigroup Global Markets Inc.
Series A-8 Citigroup Global Markets Inc.
Series B-1 Citigroup Global Markets Inc.
A-1
EXHIBIT B
TO AUCTION AGENT AGREEMENT
NOTICE OF RATINGS
Education Funding Capital Trust-II
$500,000,000 Education Loan Backed Notes consisting of Education Loan
Backed Notes Series ▇-▇, ▇▇▇▇▇▇ ▇-▇, ▇▇▇▇▇▇ ▇-▇, Series A-7, and 2003
A-8 (the "Series A Notes") and Education Loan Backed Notes Series B-1
(the "Series B Notes")
NOTICE IS HEREBY GIVEN by Education Funding Capital Trust-II
(the "Issuer") to Deutsche Bank Trust Company Americas, 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 __
Notes is ______ [and such rating is ["AAA" or
higher/lower than AAA]]*;
2. The rating by ▇▇▇▇▇'▇ Investors Services, Inc. on the
captioned Series __ Notes is ______ [and such rating is
["Aaa" or higher/lower than Aaa]]*;
3. The rating by Standard & Poor's on the captioned Series
__ Notes is ______ [and such rating is ["AAA" or
higher/lower than AAA]]*;
4. The rating by Fitch Ratings on the captioned Series __
Notes is ______ ["A" or higher/lower than A]] *.
5. The rating by ▇▇▇▇▇'▇ Investors Service, Inc. on the
captioned Series __ Notes is ______ ["A3" or
higher/lower than A3]]*; and
6. The rating by Standard & Poor's on the captioned Series
__ 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 A Notes and/or "A" on
the Series B Notes, (ii) the ▇▇▇▇▇'▇ rating is not equal to "Aaa" on the Series
A Notes and/or "A3" on the Series B Notes, and/or (iii) the S&P rating is not
equal to "AAA" on the Series A Notes and/or "A" on the Series B Notes.
B-1
The Auction Agent may rely on such ratings for all purposes of the Indenture (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-II
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Date:
-----------------------------------
B-2
EXHIBIT C
TO AUCTION AGENT AGREEMENT
NOTICE OF NOTES OUTSTANDING
EDUCATION FUNDING CAPITAL TRUST-II
EDUCATION LOAN BACKED NOTES
SERIES [A][B]-[__]
NOTICE IS HEREBY GIVEN that $___________ aggregate principal
amount of Series [A][B]-[__] Notes were outstanding at the close of business on
the immediately preceding Regular Record Date. Such aggregate principal amount
of Series [A][B]-[__] Notes, less $___________ aggregate principal amount of
Series [A][B]-[__] Notes to be redeemed by the Issuer pursuant to the Indenture,
for a net aggregate principal amount of Series [A][B]-[__] Notes of
$___________, will be available on the next Auction scheduled to be held on
________________.
Terms used herein have the meanings set forth in the Indenture
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-II
EDUCATION LOAN BACKED NOTES
SERIES ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇ and B-1
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 Indenture
relating to the above-referenced issue.
DEUTSCHE BANK TRUST COMPANY
AMERICAS, as Auction Agent
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Date:
-----------------------------------
APPROVED:
EDUCATION FUNDING CAPITAL TRUST-II
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
Date:
-----------------------------
D-1
EXHIBIT E
TO AUCTION AGENT AGREEMENT
NOTICE OF A PAYMENT DEFAULT
EDUCATION FUNDING CAPITAL TRUST-II
EDUCATION LOAN BACKED NOTES
SERIES ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇ and B-1
NOTICE IS HEREBY GIVEN that a Payment Default has occurred and
not been cured with respect to the Series [A][B]-___ Notes. Determination of the
Auction Note Interest Rate on the Auction Rate Notes pursuant to the Auction
Procedures will be suspended. The Auction Note Interest Rate on such Series of
the Auction Rate 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 Indenture
relating to the above-referenced issue.
DEUTSCHE BANK TRUST COMPANY
AMERICAS, as Auction Agent
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Date:
-----------------------------------
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 B to the Indenture. 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-II
EDUCATION LOAN BACKED NOTES
SERIES ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇ and B-1
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.
DEUTSCHE BANK TRUST COMPANY
AMERICAS, as Auction Agent
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Date:
-----------------------------------
G-1
EXHIBIT H
TO AUCTION AGENT AGREEMENT
NOTICE OF INTEREST RATE
EDUCATION FUNDING CAPITAL TRUST-II
EDUCATION LOAN BACKED NOTES
SERIES ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇ and B-1
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.
DEUTSCHE BANK TRUST COMPANY
AMERICAS, as Auction Agent
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Date:
-----------------------------------
H-1
