Exhibit 1.1
DEALER MANAGER AGREEMENT
, 2003
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Xxxxxxx X. Xxxxx & Co.
1500 Xxxxxxxx Center
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Dear Sirs:
1. Exchange Offer. Education Funding Capital Trust-I, a business trust
formed under the laws of the state of Delaware (the "Trust"), plans to make an
offer to exchange its $75,000,000 aggregate principal amount of Auction Rate
Education Loan Backed Notes, Series 2002A-1, $75,000,000 aggregate principal
amount of Auction Rate Education Loan Backed Notes, Series 2002A-2, $75,000,000
aggregate principal amount of Auction Rate Education Loan Backed Notes, Series
2002A-3, $67,800,000 aggregate principal amount of Auction Rate Education Loan
Backed Notes, Series 2002A-4, $64,500,000 aggregate principal amount of Auction
Rate Education Loan Backed Notes, Series 2002A-5, $66,000,000 aggregate
principal amount of Auction Rate Education Loan Backed Notes, Series 2002A-6,
$66,000,000 aggregate principal amount of Auction Rate Education Loan Backed
Notes, Series 2002A-7, $78,000,000 aggregate principal amount of Auction Rate
Education Loan Backed Notes, Series 2002A-8, $78,000,000 aggregate principal
amount of Auction Rate Education Loan Backed Notes, Series 2002A-9, $78,000,000
aggregate principal amount of Auction Rate Education Loan Backed Notes, Series
2002A-10, $78,000,000 aggregate principal amount of Auction Rate Education Loan
Backed Notes, Series 2002A-11, $78,000,000 aggregate principal amount of Auction
Rate Education Loan Backed Notes, Series 2002A-12, $78,000,000 aggregate
principal amount of Auction Rate Education Loan Backed Notes, Series 2002A-13,
$33,700,000 aggregate principal amount of Auction Rate Education Loan Backed
Notes, Series 2002B-1, $32,000,000 aggregate principal amount of Auction Rate
Education Loan Backed Notes, Series 2002B-2 (collectively, the "Original Notes")
for similarly titled new notes (the "Exchange Notes") on the terms and subject
to the conditions set forth in the Prospectus (as hereinafter defined) relating
to the exchange and the accompanying letters of transmittal (each a "Letter of
Transmittal"). The offer to exchange the Exchange Notes for the Original Notes
on the terms and subject to the conditions set forth in the Prospectus and the
related Letters of Transmittal is referred to individually as an "Exchange
Offer", and the offers with respect to all of the Exchange Notes are
collectively referred to as the "Exchange Offers". Capitalized terms not defined
herein shall have the meanings set forth in the Prospectus.
The Exchange Offers are expected to be commenced by the Trust on or about
, 2003 (the "Commencement Date"). The Exchange Offers shall expire at
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5:00 p.m., New York City time, on , 2003 or on such later date or time
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to which the Trust may extend the Exchange Offers (the "Expiration Date").
The Trust expressly reserves the right to amend or terminate the Exchange
Offers and not to accept for exchange any Original Notes not theretofore
accepted for exchange, upon the
occurrence of the conditions of the Exchange Offers specified in the Prospectus
under the caption "The Exchange Offer--Conditions to the Exchange Offer". The
Trust will give oral (promptly confirmed in writing) or written notice of any
amendment, termination or nonacceptance to you as promptly as practicable.
2. Appointment as Dealer Manager. Education Funding Capital I, LLC, a
Delaware limited liability company (the "Depositor"), and the Trust hereby
appoint you as exclusive Dealer Manager, and authorizes you to act as such, in
connection with the Exchange Offers. As Dealer Manager, you agree, in accordance
with your customary practice, to perform those services in connection with the
Exchange Offers as are customarily performed by investment banking firms in
connection with exchange offers of like nature, including, but not limited to,
(i) providing certain advice to the Depositor and the Trust regarding the terms
and timing of the Exchange Offers, (ii) using your best efforts to solicit
tenders of Original Notes pursuant to the Exchange Offers and to communicate
with other brokers, dealers, commercial banks and trust companies (individually,
a "Dealer" and collectively, "Dealers"), and (iii) mailing of the Prospectus,
the related Letters of Transmittal and other related documents to the holders of
Original Notes ("Holders"). If you and the Depositor and the Trust mutually
agree that you will provide any other services to the Trust, including financial
advisory or investment banking services, you and the Depositor and the Trust
shall either amend the terms of this Agreement or enter into a separate
agreement covering the terms and arrangements of such additional engagement.
3. No Liability for Acts of Dealers. You shall have no liability (in tort,
contract or otherwise) to the Trust or any other person for any act or omission
on the part of any Dealer (other than yourself) and you shall have no liability
(in tort, contract or otherwise) to the Depositor or Trust or any other person
for any losses, claims, damages or liabilities arising from your own acts or
omissions in performing your obligations as Dealer Manager hereunder or
otherwise in connection with the Exchange Offers, except for any such losses,
claims, damages or liabilities attributable to your bad faith or gross
negligence. In soliciting or obtaining tenders, no Dealer is to be deemed to be
acting as your agent or the agent of the Depositor or the Trust, and you, as
Dealer Manager, are not to be deemed the agent of the Depositor or the Trust,
any Dealer or any other person. The Depositor and the Trust acknowledge and
agree that, in your capacity as Dealer Manager, you shall act as an independent
contractor, and any of your duties arising out of your engagement pursuant to
this Agreement shall be owed solely to the Depositor and the Trust.
4. Registration Statement, Prospectus and Exchange Offer Material.
(a) The Depositor and the Trust have prepared and filed with the
Securities and Exchange Commission (the "Commission") under the Securities
Act of 1933, as amended (the "Securities Act") and the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"), a registration statement
on Form S-4 covering the registration of the Exchange Notes issuable upon
exchange for the Original Notes. Such registration statement, including the
exhibits thereto and any documents incorporated by reference therein, as
amended at the time it becomes effective or as thereafter amended or
supplemented from time to time, is herein called the "Registration
Statement." The final prospectus included in the Registration Statement
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(including any documents incorporated in the prospectus by reference) is
herein called the "Prospectus", except that if the final prospectus
furnished to the Dealer Manager for use in connection with the Exchange
Offers differs from any prospectus set forth in the Registration Statement
(whether or not such prospectus is required to be filed pursuant to Rule
424(b)), the term "Prospectus" shall refer to the final prospectus
furnished to the Dealer Manager for such use. The terms "supplement" and
"amendment" or "supplemented" and "amended" as used herein with respect to
the Prospectus shall include all documents deemed to be incorporated by
reference in the Prospectus that are filed subsequent to the date of the
Prospectus and prior to the Termination Date by the Trust with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
(b) The Registration Statement, Prospectus and the related Letters of
Transmittal; related letters from the Dealer Manager to securities brokers,
dealers, commercial banks, trust companies and other nominees; letters to
beneficial owners of Original Notes; notice of guaranteed delivery and any
other newspaper announcements, press releases and other offering materials
and information the Trust may use or prepare, approve or authorize for use
in connection with the Exchange Offers are herein collectively referred to
as the "Exchange Offer Material." The Trust authorizes you to use, and
agrees to furnish you with as many copies as you may reasonably request of,
each of the Exchange Offer Material in connection with the Exchange Offers
and for such period of time as any such material is required by law to be
delivered in connection therewith.
(c) The Trust agrees that, a reasonable time prior to using or filing
with the Commission or with any other Federal or other governmental agency,
authority or instrumentality ("Other Agency"), the Registration Statement
or any other Exchange Offer Material (whether preliminary or otherwise),
the Trust will submit copies of such material to you and will give
reasonable consideration to your and your counsel's comments, if any,
thereon.
(d) Prior to and during the period of the Exchange Offers, the
Depositor or the Trust will inform you promptly after any senior executive
officer, senior accounting or legal officer or treasurer of the Depositor
or the Trust receives notice or becomes aware of the happening of any
event, or the discovery of any fact, which it believes would require the
making of any change in any Exchange Offer Material then being used or
would affect the truth or completeness of any representation or warranty
contained in this Agreement if such representation or warranty were being
made immediately after the happening of such event or the discovery of such
fact.
(e) The Trust agrees that any reference to the Dealer Manager in any
Exchange Offer Material or in any newspaper announcements or press release
or other public document or communication is subject the Dealer Manager's
prior consent, which consent shall not be unreasonably withheld.
5. Withdrawal. If the Trust (a) uses or permits the use of, or files with
the Commission or any Other Agency, any Exchange Offer Material (i) which has
not been submitted to you for your comments or (ii) which has been so submitted
and with respect to which you have made comments material to such Exchange Offer
Material but which comments have not resulted in a response reasonably
satisfactory to you and your counsel to reflect your
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comments, or (b) shall have breached, in any material respect, any of its
representations, warranties, agreements or covenants herein, then you shall be
entitled to withdraw as Dealer Manager in connection with the Exchange Offers
without any liability or penalty to you or any other Indemnified Person (as
defined in Section 12) for such withdrawal and without loss of any right to
indemnification or contribution provided in Section 12 or to the payment of all
fees and expenses payable hereunder which have accrued to the date of such
withdrawal. If you withdraw as Dealer Manager for any of the reasons set forth
in the preceding sentence, the fees and reimbursement for your expenses through
the date of such withdrawal shall be paid to you promptly after such date.
6. Compensation. The Depositor agrees to pay or cause the Trust to pay you
as compensation for your services as Dealer Manager a fee of $___________. Such
fee shall be payable promptly upon the acceptance for payment of Original Notes
tendered in response to the Exchange Offers or upon termination of the
Exchange Offers, as applicable.
7. Expenses. The Depositor will pay or cause the Trust to pay (i) all fees
and expenses relating to the preparation, printing, filing, mailing and
publishing of all documents pertaining to the Exchange Offers; (ii) all fees and
expenses of any depositary, information agent or other agents, attorneys and
other persons retained by the Depositor or the Trust in connection with the
Exchange Offers; (iii) all fees, if any, payable to Dealers (including the
Dealer Manager) as reimbursement for their customary mailing, handling and other
expenses related to forwarding the Exchange Offers to their customers; (iv) all
advertising charges; and (v) all other fees and expenses incurred in connection
with or relating to the Exchange Offers. In addition, the Depositor agrees to
reimburse or cause the Trust to reimburse the Dealer Manager and its affiliates,
promptly upon request, for all out-of-pocket expenses, including without
limitation the fees, costs and expenses of the Dealer Manager's legal counsel,
incurred in connection with the Exchange Offers.
8. Securityholder Lists; Depository. The Trust will provide you, or will
cause the trustee under the indenture governing the Original Notes or The
Depository Trust Company ("DTC"), to provide you with copies of the Trust's
records showing the names and addresses of, and principal amounts of Original
Notes held by, the Holders as of a recent date and will use their reasonable
efforts to advise you or will cause such trustee or the DTC to advise you from
day to day during the period of the Exchange Offers as to any transfers of
record of the Original Notes. The Trust will advise you during each business day
of all Original Notes tendered or withdrawn during the preceding business day
and the names and addresses of, and the principal amount of Original Notes so
tendered or withdrawn by, each such tendering or withdrawing Holder. The Trust
will advise you of any defective tenders and of all tenders verified to be in
proper form. Not later than the opening of business on the day following the
Expiration Date, the Trust will advise you of all tendered Original Notes,
including the principal amount of Original Notes either tendered in proper form,
rejected for tender or being processed (such as Notices of Guaranteed Delivery).
The Trust has appointed Fifth Third Bank to serve as exchange agent (the
"Exchange Agent") in connection with the Exchange Offers and has instructed the
Exchange Agent to advise you daily as to such matters as you may reasonably
request.
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9. Representations. Warranties and Covenants of the Trust. The Depositor,
as creator of the Trust and the Trust represent, warrant and covenant to you
that:
(a) the Registration Statement has become effective;
(b) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has been
instituted or, to the knowledge of the Trust, threatened by the Commission;
(c) the Registration Statement and Prospectus (as amended or
supplemented if the Trust shall have furnished any amendments or
supplements thereto) comply, or will comply, as the case may be, in all
material respects with the Securities Act and the Trust Indenture Act and
do not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the date of the
Prospectus and any amendment or supplement thereto, contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading, and the Prospectus, as amended or supplemented, if applicable,
at the date of consummation of the Exchange Offers (the "Closing Date")
will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; except that the
foregoing representations and warranties shall not apply to (i) that part
of the Registration Statement which constitutes the Statement of
Eligibility and Qualification (Form T-1) of the Trustee under the Trust
Indenture Act, and (ii) statements or omissions in the Registration
Statement or the Prospectus made in reliance upon and in conformity with
information relating to you and furnished to the Trust in writing by you;
(d) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, the Trust has not incurred any
material liabilities, direct or contingent nor has there been any material
adverse change in the financial position, results of operations or
condition of the Trust that is not described in the Prospectus whether or
not arising from transactions in the ordinary course of business;
(e) the Trust is a validly created Delaware business trust and at the
Closing Date will have, full legal rights, power and authority (i) to enter
into this Agreement and the Indenture and to issue the Exchange Notes
(collectively, the "Documents"), (ii) to authorize the issuance of the
Exchange Notes and to issue and deliver the Exchange Notes to the Holders
pursuant to the terms of the Exchange Offers and the Indenture as provided
herein, and (iii) to carry out, give effect to and consummate the
transactions contemplated by the Documents and the Exchange Offers;
(f) the Documents (when executed and delivered by the respective
parties thereto) will constitute legal, valid and binding obligations of
the Trust enforceable in accordance with their respective terms except as
limited by bankruptcy, reorganization, insolvency and other similar laws
affecting enforceability of creditors' rights generally and
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provided that the availability of equitable remedies is subject to the
application of equitable principles;
(g) the Exchange Notes have been duly authorized, and when issued and
delivered in accordance with the Exchange Offers, will have been duly
executed, authenticated, issued and delivered and will constitute valid and
binding obligations of the Trust entitled to the benefits provided by the
Indenture of Trust dated as of May 1, 2002 (the "Base Indenture") by and
among the Trust, Fifth Third Bank, a banking corporation organized under
the laws of the State of Ohio, as indenture trustee (the "Indenture
Trustee"), and Fifth Third Bank, a banking corporation organized under the
laws of the State of Ohio, as trust eligible lender trustee (the "Trust
Eligible Lender Trustee"), as supplemented by the 2002 Series A1&B1
Supplemental Indenture of Trust dated as of , 2003 (the "Fourth
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Supplement" and collectively with the Base Indenture, the "Indenture")
between the Trust, the Indenture Trustee, and the Trust Eligible Lender
Trustee; the Indenture has been duly authorized and, when the Indenture is
executed and delivered by the Trust and when authorized, executed and
delivered by the other parties thereto, the Indenture, will constitute the
valid and binding agreement of the Trust; and the Indenture, upon
effectiveness of the Registration Statement, will have been duly qualified
under the Trust Indenture Act; and the Exchange Notes and the Indenture
conform to the descriptions thereof in the Prospectus;
(h) the Trust is not in breach of or in default under the Amended and
Restated Trust Agreement dated as of May 9, 2002 (the "Trust Agreement")
among the Depositor, Wilmington Trust Company, as owner trustee of the
Trust formed thereunder (the "Owner Trustee"), Fifth Third Bank, as the
co-owner trustee of the Trust formed thereunder (the "Co-Owner Trustee"),
and the Trust Eligible Lender Trustee, any applicable law or administrative
regulation of the State of Delaware, the United States or of any
department, division, agency or instrumentality of either thereof, or any
applicable court or administrative decree or order, or any indenture, loan
agreement, note, resolution, certificate, contract, agreement or other
instrument to which the Trust is a party or is otherwise subject or bound,
except for defaults that, singly or in the aggregate, have not had and will
not have a materially adverse effect on the Trust's ability to perform its
obligations thereunder;
(i) the execution and delivery of the Documents and the other
instruments contemplated by any of such documents to which the Trust is a
party, and compliance with the provisions of each thereof did not and will
not conflict with or constitute a breach of or default under the Trust
Agreement, any applicable law or administrative regulation of the State of
Ohio, the State of Delaware, the United States or of any department,
division, agency or instrumentality of any of the foregoing, or any
applicable court or administrative decree or order, or any indenture, loan
agreement, note, resolution, certificate, contract, agreement or other
instrument to which the Trust is a party or is otherwise subject or bound;
(j) to the knowledge of the Depositor and the Trust, no action, suit,
proceeding, inquiry or investigation, at law or in equity, before or by any
court, regulatory agency,
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public board or body, is pending or threatened in any way affecting the
existence of the Trust or the titles of its officers to their respective
offices or seeking to restrain or to enjoin the Exchange Offers or the
issuance, sale or delivery of the Exchange Notes or in any way contesting
or affecting the validity or enforceability of the Documents, or any action
on the part of the Trust contemplated by any of said documents, or which,
if adversely determined, would have a material adverse effect on the
financial condition or prospects of the Trust, nor, to the knowledge of the
Trust, is there any basis therefor;
(k) the Trust is not and, after giving effect to the offering and
exchange of the Exchange Notes, will not be an "investment company" or an
entity "controlled" by an "investment company", as such terms are defined
in the Investment Trust Act of 1940, as amended;
(l) all necessary action has been duly taken by the Trust to authorize
the Exchange Offers, the exchange of Exchange Notes for Original Notes
pursuant to the Exchange Offers and all other actions contemplated by this
Agreement, and no other proceedings are necessary to authorize any such
actions;
(m) the Exchange Offers, the exchange of Exchange Notes for Original
Notes pursuant to the Exchange Offers, the delivery of the Exchange Offer
Material and the execution, delivery and performance of this Agreement will
comply with the Securities Act, the Exchange Act, the Trust Indenture Act
and any applicable Blue Sky Laws;
(n) the Trust has complied, and will at the Closing Date be in
compliance, with the Trust Agreement and the Documents;
(o) all approvals, consents, authorizations, permits, elections and
orders of or filings or registrations with any governmental authority,
board, agency or commission having jurisdiction, including but not limited
to, the United States Department of Education under the Higher Education
Act, and the Ohio Secretary of State that would constitute a condition
precedent to the performance by the Trust of its obligations under the
Exchange Offers, the Exchange Notes and the Documents have been obtained
and are in full force and effect; and
(p) the Trust shall furnish such information, execute such instruments
and take such other action in cooperation with the Dealer Manager as the
Dealer Manager may reasonably request to qualify the Exchange Notes for
offer and sale under the Blue Sky Laws or other securities laws and
regulations of such states and other jurisdictions of the United States as
the Dealer Manager may designate; provided that the Trust shall not be
required to take any action that would subject it to general or unlimited
service of process in any jurisdiction where it is not now so subject.
10. Conditions to Dealer Manager's Obligations. The obligations of the
Dealer Manager hereunder shall be subject (i) to the performance by the
Depositor and the Trust of their respective obligations to be performed
hereunder or under the Indenture prior to the Closing Date, (ii) to the accuracy
of and compliance with the representations, warranties and covenants
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of the Depositor and the Trust herein, in each case as of the Commencement Date
and at all times on or prior to the Closing Date, and (iii) in the discretion of
the Dealer Manager, to the following further conditions:
(a) At the Closing Date, the Documents shall have been duly
authorized, executed and delivered by the respective parties thereto, and
in substantially the forms heretofore submitted to the Dealer Manager, with
only such changes as shall have been agreed to in writing by the Dealer
Manager, and said documents shall not have been amended, modified or
supplemented, except as may have been agreed to in writing by the Dealer
Manager and there shall have been taken in connection therewith, with the
Exchange Offers, with the issuance of the Exchange Notes and with the
transactions contemplated thereby and by this Agreement, all such actions
as, in the opinion of counsel to the Trust, shall be necessary and
appropriate.
(b) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date, there shall not have occurred any change, or
development involving a prospective change, in the condition, financial or
otherwise, or the earnings, business or operations of, the Trust from that
described in the Prospectus that, in the Dealer Manager's judgment, is
material and adverse and that makes it, in the Dealer Manager's judgment,
impracticable to recommend that Holders participate in the Exchange Offers
on the terms and in the manner contemplated by the Registration Statement.
(c) At or prior to the Closing Date, the Dealer Manager shall have
received the following documents, in each case satisfactory in form and
substance to the Dealer Manager:
(1) executed or conformed copies of the Documents duly executed
and delivered by the respective parties thereto, with such amendments,
modifications or supplements as may have been agreed to in writing by
the Dealer Manager;
(2) opinions, dated the Closing Date and addressed to the Trust
and to the Dealer Manager, of Xxxxxxxx, Xxxxxx & Finger, P.A.,
Xxxxxxxx & Shohl LLP and Xxxxxxxx Xxxx LLP, in such forms as may be
satisfactory to the Dealer Manager and the Dealer Manager's counsel;
(3) an opinion, dated the Closing Date and addressed to the
Dealer Manager, of counsel to the Dealer Manager, in such form as may
be satisfactory to the Dealer Manager;
(4) a certificate, dated the Closing Date and signed by the
President or Senior Vice President of the Depositor, in substantially
the form attached hereto as Appendix A;
(5) opinions, dated the Closing Date and addressed to the Trust
and the Dealer Manager, of counsel for the Indenture Trustee, Owner
Trustee, Co-Owner
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Trustee and the Trust Eligible Lender Trustee in such forms as may be
satisfactory to the Dealer Manager and the Dealer Manager's counsel;
(6) a certificate, dated the Closing Date and signed by the chief
financial officer Great Lakes Higher Education Guaranty Corporation or
other officer thereof acceptable to the Dealer Manager, regarding the
accuracy and completeness of the Prospectus with respect to the
information relating to Great Lakes Higher Education Guaranty
Corporation under the caption "Description of the Guarantee Agencies"
in the Prospectus in such form as may be satisfactory to the Dealer
Manager and the Dealer Manager's counsel;
(7) an opinion, dated the Closing Date and addressed to the
Dealer Manager, of counsel for Great Lakes Higher Education Guaranty
Corporation in such form as may be satisfactory to the Dealer Manager
and the Dealer Manager's counsel;
(8) an opinion, dated the Closing Date and addressed to the
Dealer Manager, of counsel for Great Lakes Higher Education Servicing
Corporation in such form as may be satisfactory to the Dealer Manager
and the Dealer Manager's counsel;
(9) an incumbency certificate for the officers of the Depositor,
the Owner Trustee and the Co-Owner Trustee;
(10) a certified copy of the resolution of the Board of Directors
of the Depositor, as the sole holder of all beneficial interests in
the Trust, authorizing the Exchange Offers and the issuance, delivery
and sale of the Exchange Notes pursuant to the terms of the Exchange
Offers;
(11) a copy of the Trust Agreement;
(12) a copy of the Certificate of Full Force and Effect of the
Depositor;
(13) evidence that the Series 2002A1 Notes rated AAA and Aaa and
the Series 2002B1 Notes are rated at least A and A3 by Fitch and
Xxxxx'x, respectively;
(14) Exchange Note specimens;
(15) U.C.C. financing statements and bailment notices relating to
the Indenture; and
(16) such additional legal opinions, certificates, instruments
and other documents as the Dealer Manager or Dealer Manager's counsel
may reasonably request to evidence the truth and accuracy, as of the
date hereof and as of the Closing Date, of the Depositor's
representations and warranties contained herein
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and of the statements and information contained in the Prospectus and
the due performance and satisfaction by the Trust at or prior to the
Closing of all agreements then to be performed and all conditions then
to be satisfied by the Depositor or the Trust in connection with the
transactions contemplated by the Documents and the Prospectus.
The opinions and certificates and other evidence referred to above shall be
in form and substance satisfactory to the Dealer Manager in its reasonable
opinion.
If the Depositor and the Trust shall be unable to satisfy the conditions to
the obligations of the Dealer Manager contained in this Agreement, this
Agreement shall terminate and neither the Dealer Manager nor the Depositor or
the Trust shall be under any further obligation hereunder, except as provided in
Section 7 hereof.
11. Additional Covenants of the Depositor and the Trust. The Depositor or
the Trust will advise you promptly of (i) the occurrence of any event which
could cause the Trust to withdraw or terminate the Exchange Offers or would
permit the Trust to exercise any right not to exchange the Exchange Notes
tendered pursuant to the Exchange Offers, (ii) any proposal or requirement to
issue, amend or supplement any Exchange Offer Material, (iii) the issuance of
any material communication, comment or order by the Commission or any Other
Agency concerning the Exchange Offers (and, if in writing, will furnish you a
copy thereof) and (iv) any other information relating to the Exchange Offers
which you may from time to time reasonably request.
12. Indemnification. The Depositor hereby agrees to hold you harmless and
to indemnify you (including any of your affiliated companies and any director,
officer, agent or employee of you or any such affiliated company), and any
director, officer or other person controlling (within the meaning of Section
20(a) of the Exchange Act) you (including any of your affiliated companies)
(collectively, the "Indemnified Persons") from and against any and all losses,
claims, damages, liabilities or expenses (including reasonable fees and expenses
of counsel and reasonable expenses incurred in the investigation of, preparing,
pursuing or defending any action, suit, investigation or proceeding, commenced
or threatened, or any claim whatsoever and whether or not you or any other
Indemnified Person shall be a party thereto), whether in contract, tort or
otherwise and as incurred or suffered, (a) arising out of or based upon (i) any
untrue statement or alleged untrue statement of a material fact contained in the
Prospectus or any other Exchange Offer Material, or any omission or alleged
omission to state in the Prospectus or any other Exchange Offer Material a
material fact necessary to make the statements made therein, in the light of the
circumstances under which they were made, not misleading or (ii) any withdrawal
or termination by the Trust of, or failure by the Trust to make or consummate,
the Exchange Offers or (iii) any breach by the Trust of any representation or
warranty or failure to comply with any of the agreements contained herein or (b)
otherwise arising out of, relating to or in connection with the Exchange Offers
or your role in connection therewith, whether the event allegedly giving rise to
such claim shall have occurred prior to the commencement of, during the period
of, or subsequent to the consummation of, the Exchange Offers; except, in the
case of clause (b) above, for any such loss, claim, damage, liability or expense
which resulted primarily from the bad faith, gross negligence or willful
misconduct of
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any Indemnified Person. In the event a court of competent jurisdiction
determines by final and nonappealable judgment that any such losses, actions,
claims, demands, damages, liabilities or expenses of any Indemnified Person
resulted from actions taken or omitted to be taken by such Indemnified Person in
bad faith or from such Indemnified Person's gross negligence or willful
misconduct, you will promptly return all funds paid to you by the Depositor
pursuant to this Section 12 and customary interest thereon. The foregoing
indemnity shall be in addition to any liability which the Depositor might
otherwise have to you and such other Indemnified Persons.
Neither the Depositor nor the Trust shall, without the prior written
consent of the Indemnified Person, settle, compromise or consent to the entry of
any judgment in or otherwise seek to terminate any pending or threatened action,
claim, suit, investigation or proceeding in respect of which any Indemnified
Person is or could have been a party and indemnity could have been sought
hereunder by such Indemnified Person, unless such settlement includes an
unconditional release of such Indemnified Person from all liability on claims
that are the subject matter of such proceeding. No Indemnified Person seeking
indemnification, reimbursement or contribution pursuant to this Agreement shall,
without the Depositor's prior written consent, settle, compromise, consent to
the entry of. any judgment in or otherwise seek to terminate any action, claim,
suit, investigation or proceeding referred to in the preceding paragraph. The
Depositor and the Trust agree to notify you promptly of the assertion of any
claim in connection with the Exchange Offers against either of them, any of
their respective officers or directors or any person who controls it within the
meaning of Section 20(a) of the Exchange Act.
Upon the assertion of any claim in connection with the Exchange Offers
against any Indemnified Person as to which such Indemnified Person may seek
indemnity under this Section 12, such Indemnified Person shall notify the
Depositor and the Trust promptly in writing, and the Depositor, upon the request
of such Indemnified Person, shall retain counsel reasonably satisfactory to you
to represent such Indemnified Person and any others the Depositor may designate
in such proceeding and shall pay the fees and disbursements of such counsel
related to such proceeding. Failure to so notify the Depositor or the Trust
shall not, however, relieve the Depositor from any liability which it may have
on account of the indemnity under this Section 12 if the Depositor has not been
prejudiced in any material respect for such failure. In any such proceeding the
defense of which shall have been so assumed, any Indemnified Person shall have
the right to participate in such litigation or proceeding and to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person unless (i) the Depositor and the Indemnified Person
shall have mutually agreed to the retention of such counsel, (ii) the Depositor
shall have failed within a reasonable time to retain counsel reasonably
satisfactory to you, or (iii) the named parties to any such proceeding
(including any impleaded parties) include either the Depositor or the Trust and
the Indemnified Person and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
them. Such firm shall be designated in writing by you. It is understood that the
Trust shall not, in connection with any proceeding or related proceedings in the
same jurisdiction, be liable for the reasonable fees and expenses of more than
one separate firm (in addition to any local counsel) for all such Indemnified
Persons and that all such fees and expenses shall be reimbursed as they are
incurred upon submission to the Depositor and the Trust of itemized statements
in reasonable detail. The Depositor shall not be liable for any settlement of
any litigation or proceeding effected without its written consent, which consent
11
shall not be unreasonably withheld, but if settled with such consent or if there
be a final judgment for the plaintiff, the Depositor agrees, subject to the
provisions of this Section 12, to indemnify the Indemnified Person from and
against any loss, damage, liability or expense by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified
Person shall have requested the Depositor to reimburse such Indemnified Person
for fees and expenses of counsel as contemplated by the first sentence of this
paragraph, the Depositor agrees that it shall be liable for any settlement of
any proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by the Depositor of the aforesaid
request and (ii) the Depositor shall not have reimbursed the Indemnified Person
in accordance with such request prior to the date of such settlement.
If the indemnity provided for in the foregoing paragraphs of this Section
12 is finally judicially determined by a court of competent jurisdiction to be
unavailable to an Indemnified Person in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then you and the Depositor, in lieu
of the Depositor's indemnifying such Indemnified Person, agree that the
Depositor shall contribute to the amount paid or payable by such Indemnified
Person as a result of such losses, claims, damages, liabilities or expenses (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Trust and by you from the Exchange Offers or (ii) if the allocation
provided by the foregoing clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in the foregoing clause (i), but also the relative fault of either the
Depositor or the Trust and of you in connection with the statements, actions or
omissions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations; provided,
however, that in no event shall your aggregate contribution to the amount paid
or payable exceed the aggregate amount of fees actually received by you pursuant
to this Agreement. The relative benefits received by the Trust on the one hand
and by you on the other shall be deemed to be in the same proportion as (i) the
maximum aggregate value of the Exchange Notes proposed to be exchanged by the
Trust for the Original Notes pursuant to the Exchange Offers bears to (ii) the
maximum aggregate fee proposed to be paid to you pursuant to Section 6. The
relative fault of either the Depositor or the Trust on the one hand and of you
on the other (i) in the case of an untrue or alleged untrue statement of a
material fact or an omission or alleged omission to state a material fact, shall
be determined by reference to, among other things, whether such statement or
omission relates to information supplied by the Depositor or the Trust or by you
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission and (ii) in the
case of any other action or omission, shall be determined by reference to, among
other things, whether such action or omission was taken or omitted to be taken
by the Depositor or the Trust or by you and the parties' relative intent,
knowledge, access to information and opportunity to prevent such action or
omission.
The Depositor and you agree that it would not be just and equitable if
contribution pursuant to this Section 12 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages, liabilities or expenses referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any
12
legal or other expenses reasonably incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
13. Termination and Survival of Certain Provisions. This Agreement may be
terminated (i) by you (A) upon a withdrawal by you as Dealer Manager pursuant to
Section 5, (B) if the Trust determines to terminate or withdraw the Exchange
Offers prior to consummation thereof or (C) if there is a good faith
disagreement between you and the Trust with respect to any term or condition of
the Exchange Offers, or (ii) by the Trust (A) if it determines to terminate or
withdraw the Exchange Offers prior to consummation thereof or (B) if there is a
good faith disagreement between you and the Trust with respect to any term or
condition of the Exchange Offers. This Agreement will otherwise terminate if the
Commencement Date shall not have occurred on or prior to , 2003,
---------------
or such later date as may be mutually agreed upon, or upon the consummation of
the Exchange Offers. The indemnity and contribution agreements contained in
Section 12, the fee and expense reimbursement agreements contained in Sections 6
and 7, the payment obligations, if any, provided for in Section 5 and the
representations and warranties of the Trust set forth in this Agreement shall
remain operative and in full force and effect regardless of (i) any failure to
commence, or the withdrawal, termination or consummation of, the Exchange Offers
or the termination or assignment of this Agreement, (ii) any investigation made
by or on behalf of any Indemnified Person, and (iii) the completion of your
services hereunder.
14. Severability. If any provision hereof shall be determined to be
invalid, illegal or unenforceable in any respect, such determination shall not
affect such provision in any other respect or any other provision hereof, which
shall remain in full force and effect so long as the economic or legal substance
of the Exchange Offers and the agreements contained herein are not affected in
any manner adverse to any party.
15. Counterparts. This Agreement may be executed in one or more separate
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
16. Binding Effect. This Agreement, including any right to indemnify or
contribution hereunder, shall inure to the benefit of and be binding upon the
Trust, you and the other Indemnified Persons (as defined in Section 12), and
each of your and their respective successors and assigns. Nothing in this
Agreement is intended, or shall be construed, to give to any other person or
entity any right hereunder or by virtue hereof.
17. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio, without regard to principles of
conflicts of law.
18. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof.
19. Notices. All notices and other communications required or permitted to
be given under this Agreement shall be in writing and shall be deemed to have
been duly given if
13
delivered personally or sent by registered or certified mail, return receipt
requested, postage prepaid, to the parties hereto as follows:
(a) If to you:
Xxxxxxx X. Xxxxx & Co.
1500 Xxxxxxxx Center
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxx X. Xxxxxxx
with a copy to:
Squire, Xxxxxxx & Xxxxxxx L.L.P.
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
(b) If to the Trust:
Education Funding Capital Trust-I
c/o Fifth Third Bank
MD 10AT60
00 Xxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxxxx
with copies to:
Education Funding Capital Trust-I
c/o Education Funding Capital I, LLC
0 Xxxx Xxxxxx Xxxxxx, Xxxxx 000X
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxx
Xxxxxxxx, Xxxx LLP
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Xxxxxxxx Xxxx Xxxxxxx, Esq.
14
Please indicate your willingness to act as Dealer Manager on the terms set
forth herein and your acceptance of the foregoing provisions by signing in the
space provided below for that purpose and returning to us a copy of this
Agreement, whereupon this Agreement and your acceptance shall constitute a
binding agreement between us.
Very truly yours,
WILMINGTON TRUST COMPANY, not in its
individual capacity, but solely as
Owner Trustee of Education Funding
Capital Trust-I
By:
-------------------------------------
Name:
Title:
FIFTH THIRD BANK, not in its individual
capacity but solely as Co-Owner Trustee
of Education Funding Capital Trust-I
By:
-------------------------------------
Name:
Title:
EDUCATION FUNDING CAPITAL I, LLC
By:
-------------------------------------
Name:
Title:
Accepted as of the date
first set forth above:
XXXXXXX X. XXXXX & Co.
By:
--------------------------------------
Name:
Title:
APPENDIX A
CERTIFICATE OF THE TRUST PURSUANT TO SECTION 10(C)(4)
OF THE DEALER MANAGER AGREEMENT
The undersigned, Education Funding Capital I, LLC, as creator of Education
Funding Capital Trust-I (the "Trust"), pursuant to Section 10(c)(4) of the
Dealer Manager Agreement dated , 2003 (the "Dealer Manager Agreement")
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between the Depositor, the Trust and the Dealer Manger, hereby certifies as
follows (all capitalized terms used herein are used as defined in the Dealer
Manager Agreement):
(A) Each of the representations and warranties of the Depositor and the
Trust set forth in the Dealer Manager Agreement and in the Indenture is true and
correct in all material respects on the date hereof as if on and as of the date
hereof with the same effect as if made on the date hereof;
(B) The Trust has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied under the Documents and the
Exchange Offers at or prior to the date hereof.
EDUCATION FUNDING CAPITAL I, LLC
Date: , 2003 By:
---------- --------------------------------
Name:
Title:
A-1
