EXHIBIT 99.8
EXECUTION COPY
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BROKER-DEALER AGREEMENT
Between
DEUTSCHE BANK TRUST COMPANY AMERICAS
as Auction Agent
and
XXXXXXX X. XXXXX & CO.
as Broker-Dealer
Dated as of October 1, 2003
relating to
EDUCATION FUNDING CAPITAL TRUST-III
$100,000,000 Education Loan Backed Notes
consisting of
Education Loan Backed Notes, Series A-4
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Broker-Dealer Agreement (Xxxxx)
TABLE OF CONTENTS
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Page
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RECITALS
1. DEFINITIONS AND RULES OF CONSTRUCTION.......................................1
1.1. Terms Defined by Reference to the Indenture...........................1
1.2. Terms Defined Herein..................................................2
1.3. Rules of Construction.................................................2
2. THE AUCTION.................................................................3
2.1. Purpose: Incorporation by Reference of Auction Procedures and
Settlement Procedures.................................................3
2.2. Preparation for Each Auction..........................................3
2.3. Auction Schedule: Method of Submission of Orders......................4
2.4. Notices...............................................................6
2.5. Service Charge to Be Paid to the Broker-Dealer........................6
2.6 Settlement............................................................6
3. THE AUCTION AGENT...........................................................7
3.1. Duties and Responsibilities...........................................7
3.2. Rights of the Auction Agent...........................................7
3.3. The Auction Agent's Disclaimer........................................7
4. MISCELLANEOUS...............................................................8
4.1. Termination...........................................................8
4.2. Participant...........................................................8
4.3. Communications........................................................8
4.4. Entire Agreement......................................................9
4.5. Benefits..............................................................9
4.6. Amendment; Waiver....................................................10
4.7. Successors and Assigns...............................................10
4.8. Severability.........................................................10
4.9. Execution in Counterparts............................................10
5. GOVERNING LAW..............................................................10
Exhibit A - Settlement Procedures
Exhibit B - Order Form
Exhibit C - Notice of Transfer
Exhibit D - Notice of a Failure to Deliver or Make Payment
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Broker-Dealer Agreement (Xxxxx)
BROKER-DEALER AGREEMENT
THIS BROKER-DEALER AGREEMENT (this "Agreement") dated as of October 1, 2003
is between DEUTSCHE BANK TRUST COMPANY AMERICAS, a New York banking corporation
(together with its successors and assigns, the "Auction Agent"), pursuant to
authority granted to it in the Auction Agent Agreement (defined below), acting
not in its individual capacity, but solely as agent for Education Funding
Capital Trust-III, a Delaware statutory trust, (the "Issuer"), and XXXXXXX X.
XXXXX & CO. (together with its successor and assigns, the "Broker-Dealer").
RECITALS
The Issuer proposes to cause the Indenture Trustee (defined below) to
authenticate and deliver its Education Loan Backed Notes, Series A-4 (the
"Auction Rate Notes"). The Auction Rate Notes are being issued under an
Indenture of Trust dated as of October 1, 2003 (the "Indenture") by and among
the Issuer, Fifth Third Bank, an Ohio banking corporation, as Indenture Trustee
(the "Indenture Trustee"), and Fifth Third Bank, as Trust Eligible Lender
Trustee (the "Trust Eligible Lender Trustee").
The Indenture provides that the interest rate for each Series of Auction
Rate Notes for each Auction Period after its respective Initial Period shall,
except as otherwise provided in the Indenture, equal the Auction Note Interest
Rate that the Auction Agent advises has resulted on the Auction Date from the
implementation of the Auction Procedures set forth in Appendix B to the
Indenture.
Pursuant to Section 2.9 of the Auction Agent Agreement dated as of October
1, 2003 (the "Auction Agent Agreement") among the Indenture Trustee, the Auction
Agent and the Issuer, the Indenture Trustee has consented to the execution and
delivery of this Agreement.
The Auction Procedures require the participation of one or more
Broker-Dealers.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Auction Agent, as agent of the Issuer, and the
Broker-Dealer agree as follows:
Section 1. Definitions and Rules of Construction.
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1.1. Terms Defined by Reference to the Indenture. Capitalized terms used
herein and not otherwise defined herein shall have the meanings given such terms
in the Indenture.
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Broker-Dealer Agreement (Xxxxx)
1.2. Terms Defined Herein. As used herein and in the Settlement
Procedures, defined below, the following terms shall have the following
meanings, unless the context otherwise requires:
"Auction" shall have the meaning specified in Section 2.1 hereof.
"Auction Procedures" shall mean the Auction Procedures that are set forth
in Appendix B to the Indenture.
"Auction Rate" shall mean the Auction Rate as defined in Appendix B to the
Indenture.
"Authorized Auction Agent Officer" shall mean, with respect to the Auction
Agent, each 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
of this Agreement in a written communication to the Broker-Dealer.
"Broker-Dealer Fee Rate" shall be 0.25% per annum, as may be adjusted from
time to time pursuant to Section 6.5 of the Auction Agent Agreement.
"Broker-Dealer Officer" shall mean each officer or employee of the
Broker-Dealer designated as a "Broker-Dealer Officer" for purposes of this
Agreement in a written communication to the Auction Agent.
"Notice of Failure to Deliver or Make Payment" shall mean a notice
substantially in the form of Exhibit D hereto.
"Notice of Transfer" shall mean a notice substantially in the form of
Exhibit C hereto.
"Order Form" shall mean the form to be submitted by any Broker-Dealer on or
prior to any Auction Date substantially in the form of Exhibit B hereto.
"Settlement Procedures" shall mean the Settlement Procedures attached
hereto as Exhibit A.
1.3. Rules of Construction. Unless the context or use indicate another or
different meaning or intent, the following rules shall apply to the construction
of this Agreement.
(a) Words importing the singular number shall include the plural number
and vice versa.
(b) The captions and headings herein are solely for convenience of
reference and shall not constitute a part of this Agreement nor shall they
affect its meaning, construction or effect.
(c) The words "hereof," "herein," "hereto," and other words of similar
import refer to this Agreement as a whole.
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Broker-Dealer Agreement (Xxxxx)
(d) All references herein to a particular time of day shall be to New
York City time.
(e) The rights and duties of the Broker-Dealer and the Auction Agent
under this Agreement shall apply to each Series of the Auction Rate Notes, but
separately. References to "Auction Rate Notes," unless the context clearly
contemplates a reference to all "Auction Rate Notes," shall refer only to a
particular Series of Auction Rate Notes as to rights and duties regarding such
Series.
Section 2. The Auction.
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2.1. Purpose: Incorporation by Reference of Auction Procedures and
Settlement Procedures.
(a) On each Auction Date, the provisions of the Auction Procedures shall
be followed by the Auction Agent for the purpose of determining the Auction Rate
for each Auction Period after the Initial Period. Each periodic operation of
such procedures is hereinafter referred to as an "Auction".
(b) All of the provisions contained in the Auction Procedures and the
Settlement Procedures are incorporated herein by reference in their entirety and
shall be deemed to be a part of this Agreement to the same extent as if such
provisions were fully set forth herein.
(c) The Broker-Dealer and other broker-dealers, as listed on Exhibit A to
the Auction Agent Agreement as it may be amended from time to time, may
participate in Auctions for their own accounts.
2.2. Preparation for Each Auction.
(a) Not later than 9:30 a.m. on each Auction Date, the Auction Agent
shall notify the Broker-Dealer by telephone of the All Hold Rate, the Maximum
Rate, the Net Loan Rate and the Applicable LIBOR Rate used in determining such
rates, provided, with respect to notification of the Net Loan Rate, the
Administrator shall have communicated to the Auction Agent the components of the
Net Loan Rate as required by the Indenture.
(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 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-Dealer not later than the earlier of 9:15
a.m. on the new Auction Date and 9:15 a.m. on the old Auction Date. Thereafter,
the Broker-Dealer shall use its best efforts to promptly notify its customers
who are Existing Owners of such change in the Auction Date.
(c) From time to time upon request of the Auction Agent, the
Broker-Dealer shall provide the Auction Agent with a statement of the aggregate
amount of each Series of Auction Rate Notes held by the Broker-Dealer as an
Existing Owner for its own account or otherwise, as well as with a list of the
Broker-Dealer's customers that the Broker-Dealer believes are Existing Owners of
any Series of the Auction Rate Notes (listed by Series) and the aggregate
principal
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Broker-Dealer Agreement (Xxxxx)
amount of each Series of Auction Rate Notes beneficially owned by each such
customer. Except as permitted by Section 2.10 of the Auction Agent Agreement,
the Auction Agent shall keep confidential any such information and shall not
disclose any such information so provided to any Person other than the
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 would expose the
Auction Agent to liability, loss, claim or damage for which the Auction Agent
has not previously received indemnity reasonably satisfactory to it. The Auction
Agent shall notify the Broker-Dealer, the Issuer and the Indenture Trustee
promptly upon receipt of any request or demand to disclose such information and
shall cooperate with any party seeking a protective order or similar relief.
(d) The Auction Agent shall send by telecopy or other means a copy of any
Notice of Notes Outstanding, in substantially the form of Exhibit C to the
Auction Agent Agreement, received from the Indenture Trustee to the
Broker-Dealer in accordance with Section 4.3 hereof.
2.3. Auction Schedule: Method of Submission of Orders.
(a) The Auction Agent shall conduct Auctions for the Auction Rate Notes
on the Auction Date in accordance with the schedule set forth below. Pursuant to
the Auction Agent Agreement, 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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Broker-Dealer Agreement (Xxxxx)
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 the 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) hereof.
(b) The Broker-Dealer agrees to maintain a list of Potential Owners and
to contact the Potential Owners on such list on or prior to each Auction Date
for the purposes of participating in the Auction on such Auction Date.
(c) The Broker-Dealer shall submit Orders to the Auction Agent in writing
by delivering an Order Form. The Broker-Dealer shall submit separate Orders to
the Auction Agent for each Potential Owner or Existing Owner on whose behalf the
Broker-Dealer is submitting an Order and shall not net or aggregate the Orders
of different Potential Owners or Existing Owners on whose behalf the
Broker-Dealer is submitting Orders.
(d) The Broker-Dealer shall deliver to the Auction Agent (i) a Notice of
Transfer with respect to any transfer of Auction Rate Notes made through the
Broker-Dealer by an Existing Owner to another Person other than pursuant to an
Auction, and (ii) a Notice of Failure to Deliver or Make Payment with respect to
the failure of any Auction Rate Notes to be transferred to or payment to be made
by any Person that purchased or sold Auction Rate Notes through the
Broker-Dealer pursuant to an Auction. The Auction Agent is not required to
accept any notice delivered pursuant to the terms of the foregoing sentence with
respect to an Auction unless it is received by the Auction Agent by 3:00 p.m. on
the Business Day next preceding the related Auction Date.
(e) Any Broker-Dealer that is an affiliate of the Issuer must submit at
the next Auction therefor a Sell Order covering all Auction Rate Notes held for
its own account. The Auction Agent shall have no duty or liability with respect
to monitoring or enforcing the requirements of this Section 2.3(e).
(f) The Broker-Dealer agrees to handle its customers' Orders in
accordance with its duties under applicable securities laws and rules.
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2.4. Notices.
(a) On each Auction Date, the Auction Agent shall notify the
Broker-Dealer by telephone of the results of the Auction as set forth in
paragraph (a) of the Settlement Procedures. If previously requested by the
Broker-Dealer, the Auction Agent shall notify, by 10:30 a.m. on the Business Day
immediately following such Auction Date, the Broker-Dealer in writing of the
disposition of all Orders submitted by the Broker-Dealer in the Auction held on
such Auction Date.
(b) The Broker-Dealer shall notify each Existing Owner or Potential Owner
on whose behalf the Broker-Dealer has submitted an Order as set forth in
paragraph (b) of the Settlement Procedures and take such other action as is
required to be taken by the Broker-Dealer pursuant to the Settlement Procedures.
(c) Upon receipt, the Auction Agent shall deliver to the Broker-Dealer
all notices and certificates that the Auction Agent is required to deliver to
the Broker-Dealer pursuant to Section 2 of the Auction Agent Agreement at the
times and in the manner set forth in the Auction Agent Agreement.
2.5. Service Charge to Be Paid to the Broker-Dealer. With respect to each
Auction for which there were Sufficient Bids or all Auction Rate Notes were
subject to Hold Orders, the Auction Agent shall pay to the Broker-Dealer from
moneys received from the Indenture Trustee, not later than 12:00 noon on each
Monthly Expense Payment Date, 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.
2.6 Settlement.
(a) If any Existing Owner on whose behalf the Broker-Dealer has submitted
a Bid or Sell Order for Auction Rate Notes that was accepted in whole or in
part, fails to instruct its Participant to deliver the Auction Rate Notes
subject to such Bid or Sell Order against payment therefor, the Broker-Dealer
shall instruct such Participant to deliver such Auction Rate Notes against
payment therefor and the Broker-Dealer may deliver to the Potential Owner on
whose behalf the Broker-Dealer submitted a Bid that was accepted in whole or in
part, a principal amount of the Auction Rate Notes that is less than the
principal amount of the Auction Rate Notes specified in such Bid to be purchased
by such Potential Owner. Notwithstanding the foregoing terms of this Section,
any delivery or nondelivery of Auction Rate Notes that represents any departure
from the results of an Auction, as determined by the Auction Agent, shall be of
no effect unless and until the Auction Agent shall have been notified of such
delivery or non-delivery in accordance with the terms of Section 2.3(d) hereof.
The Auction Agent shall have no duty or liability with respect to enforcement of
this Section 2.6(a).
(b) Neither the Auction Agent, the Indenture Trustee, nor the Issuer
shall have any responsibility or liability with respect to the failure of an
Existing Owner, a Potential Owner or
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Broker-Dealer Agreement (Xxxxx)
its respective Participant to deliver Auction Rate Notes or to pay for Auction
Rate Notes sold or purchased pursuant to the Auction Procedures or otherwise.
The Auction Agent shall have no responsibility for any adjustment to the fees
paid pursuant to Section 2.5 hereof as a result of any failure described in this
Section 2.6(b).
Section 3. The Auction Agent.
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3.1. Duties and Responsibilities.
(a) The Auction Agent is acting hereunder solely as agent for the Issuer
and owes no fiduciary duties to any Person by reason of this Agreement.
(b) The Auction Agent undertakes to perform such duties and only such
duties as are specifically set forth in this Agreement, and no implied covenants
or obligations shall be read into this Agreement against the Auction Agent.
(c) In the absence of bad faith or negligence on its part, the Auction
Agent shall not be liable for any action taken, suffered, or omitted or for any
error of judgment made by it in the performance of its duties under this
Agreement. The Auction Agent shall not be liable for any error of judgment made
in good faith unless the Auction Agent shall have been negligent in ascertaining
(or failing to ascertain) the pertinent facts.
3.2. Rights of the Auction Agent.
(a) The Auction Agent may rely and shall be protected in acting or
refraining from acting upon any communication authorized by this Agreement and
upon any written instruction, notice, request, direction, consent, report,
certificate, share 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 by this Agreement that the Auction Agent
believes in good faith to have been given by the Indenture Trustee, a
Broker-Dealer or the Issuer. The Auction Agent may record telephone
communications with the Broker-Dealers.
(b) The Auction Agent may consult with counsel of its own choice, and the
advice of such counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon.
(c) The Auction Agent shall not be required to advance, expend or risk
its own funds or otherwise incur or become exposed to financial liability in the
performance of its duties hereunder.
(d) The Auction Agent may perform its duties and exercise its rights
hereunder either directly or by or through agents or attorneys and shall not be
responsible for any willful misconduct or negligence on the part of any agent or
attorney appointed by it with due care hereunder.
3.3. The Auction Agent's Disclaimer. The Auction Agent makes no
representation as to the correctness of the recitals in this Agreement or the
Auction Agent Agreement with respect to other parties thereto or the validity or
adequacy of the Auction Rate Notes.
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Broker-Dealer Agreement (Xxxxx)
Section 4. Miscellaneous.
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4.1. Termination. Any party may terminate this Agreement at any time upon
30 days' prior notice to the other party; provided, however, that if the
Broker-Dealer is Xxxxxxx X. Xxxxx & Co., neither the Broker-Dealer nor the
Auction Agent may terminate this Agreement without first obtaining prior written
consent of the Indenture Trustee and the Issuer to such termination, which
consent shall not be unreasonably withheld or delayed. This Agreement shall
automatically terminate upon the delivery of certificates representing the
Auction Rate Notes pursuant to Section 1.01(g) of the Indenture, upon the Stated
Maturity of the Auction Rate Notes, or upon termination of the Auction Agent
Agreement.
4.2. Participant. The Broker-Dealer is, and shall remain for the term of
this Agreement, a member of, or Participant in, the Securities Depository (or an
affiliate of such a member or Participant).
4.3. Communications. Except for (i) communications authorized to be made
by telephone pursuant to this Agreement or the Auction Procedures and (ii)
communications in connection with the 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 forth below:
If to the Broker-Dealer Xxxxxxx X. Xxxxx & Co.
000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attention: Syndicate Desk
Telephone Number: 000.000.0000
Facsimile Number: 727.502.3625
If to the Market Agent: Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Student Loan Group
Telephone Number: 000.000.0000
Facsimile Number: 212.816.0598
If to the Auction Agent: Deutsche Bank Trust Company Americas
Corporate Trust & Agency Services
00 Xxxx Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone Number: 000.000.0000
Facsimile Number: 212.797.8600
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Broker-Dealer Agreement (Xxxxx)
If to the Indenture Trustee: Fifth Third Bank
MD 10AT60
00 Xxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Corporate Trust Administration
Telephone: 000.000.0000
Facsimile: 513.534.3115
If to the Issuer: Education Funding Capital Trust-III
c/o Fifth Third Bank
MD 10AT60
00 Xxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Corporate Trust Administration
Telephone: 000.000.0000
Facsimile: 513.534.3115
with a copy to: Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Corporate Trust Administration
Telephone: 000.000.0000
Facsimile: 203.975.6299
or such other address or facsimile number as such party may hereafter specify
for such purpose by notice to the other party. Each such notice, request or
communication shall be effective when delivered at the address specified herein.
Communications shall be given on behalf of the Broker-Dealer by a Broker-Dealer
Officer and on behalf of the Auction Agent by an Authorized Auction Agent
Officer. The Broker-Dealer may record telephone communications with the Auction
Agent.
4.4. Entire Agreement. This Agreement contains the entire agreement
between the parties relating to the subject matter hereof, and there are not
other representations, endorsements, promises, agreements or understandings,
oral, written or inferred, between the parties relating to the subject matter
hereof.
4.5. Benefits. Nothing in this Agreement, express or implied, shall give
to any Person, other than the Auction Agent, the Broker-Dealer and the Issuer
and their respective successors and assigns, any benefit of any legal or
equitable right, remedy or claim under this Agreement.
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Broker-Dealer Agreement (Xxxxx)
4.6. Amendment; Waiver.
(a) This Agreement shall not be deemed or construed to be modified,
amended, rescinded, canceled or waived, in whole or in part, except by a written
instrument signed by a duly authorized representative of the parties hereto.
This Agreement may not be amended without first obtaining the prior written
consent of the Issuer.
(b) Failure of either party to this Agreement to exercise any right or
remedy hereunder in the event of a breach of this Agreement by the other party
shall not constitute a waiver of any such right or remedy with respect to any
subsequent breach.
4.7. Successors and Assigns. This Agreement shall be binding upon, inure
to the benefit of, and be enforceable by, the respective successors and assigns
of each of the Broker-Dealer and the Auction Agent.
4.8. Severability. If any clause, provision or section of this Agreement
shall be ruled invalid or unenforceable by any court of competent jurisdiction,
the invalidity or unenforceability of such clause, provision or section shall
not affect any remaining clause, provision or section hereof.
4.9. Execution in Counterparts. This Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
Section 5. Governing Law.
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This 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.
[remainder of page intentionally left blank; signature page follows]
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Broker-Dealer Agreement (Xxxxx)
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers and
effective as of the date first written above.
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Auction Agent
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: Vice President
XXXXXXX X. XXXXX & CO.,
as Broker-Dealer
By: /s/ Xxxxxx X. Xxxx
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Name: Xxxxxx X. Xxxx
Title: First Vice President
Acknowledged and Agreed to:
EDUCATION FUNDING CAPITAL TRUST-III,
as Issuer, by FIFTH THIRD BANK, not in
its individual capacity, but solely as
Co-Owner Trustee on behalf of the
Issuer
By: /s/ Xxxxxx X. Xxxxxxx-XxXxxxx
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Name: Xxxxxx X. Xxxxxxx-XxXxxxx
Title: Assistant Vice President and
Senior Trust Officer
Broker-Dealer Agreement (Xxxxx)
Consented to:
FIFTH THIRD BANK, as Indenture Trustee
By: /s/ Xxxxxx X. Xxxxxxx-XxXxxxx
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Name: Xxxxxx X. Xxxxxxx-XxXxxxx
Title: Assistant Vice President and
Senior Trust Officer
Broker-Dealer Agreement (Xxxxx)
EXHIBIT A TO BROKER-DEALER AGREEMENT
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SETTLEMENT PROCEDURES
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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
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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.
A-2
Broker-Dealer Agreement (Xxxxx)
(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
A-3
Broker-Dealer Agreement (Xxxxx)
determined by the Auction Agent, shall be of no effect unless and until the
Auction Agent shall have been notified of such delivery or nondelivery in
accordance with the provisions of the Auction Agent Agreement and the
Broker-Dealer Agreements. Neither the Indenture Trustee nor the Auction Agent
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.
A-4
Broker-Dealer Agreement (Xxxxx)
EXHIBIT B TO BROKER-DEALER AGREEMENT
------------------------------------
EDUCATION FUNDING CAPITAL TRUST-III
Education Loan Backed Notes, Series A-4
ORDER FORM
----------
[Auction Date]
Series A-4
The undersigned Broker-Dealer submits the following orders on behalf
of the Bidder(s) indicated below:
BIDS BY EXISTING OWNERS
-----------------------
PRINCIPAL AMOUNT OF
NOTES ($50,000 OR
INTEGRAL MULTIPLES
EXISTING OWNER* THEREOF) BID RATE
------------------- ------------------- -------------------
1. ________________ ___________________ ___________________
2. ________________ ___________________ ___________________
3. ________________ ___________________ ___________________
4. ________________ ___________________ ___________________
5. ________________ ___________________ ___________________
6. ________________ ___________________ ___________________
7. ________________ ___________________ ___________________
8. ________________ ___________________ ___________________
9. ________________ ___________________ ___________________
10.________________ ___________________ ___________________
*Existing Owners may be described by name or other reference as determined in
the sole discretion of the Broker-Dealer.
B-1
Broker-Dealer Agreement (Xxxxx)
EDUCATION FUNDING CAPITAL TRUST-III
Education Loan Backed Notes, Series A-4
BIDS BY POTENTIAL OWNERS
------------------------
PRINCIPAL
AMOUNT OF
NOTES ($50,000
OR INTEGRAL
POTENTIAL MULTIPLES
OWNER* THEREOF) BID RATE SERIES
----------------- ----------------- ----------------- ---------------
1. ______________ _________________ _________________ _______________
2. ______________ _________________ _________________ _______________
3. ______________ _________________ _________________ _______________
4. ______________ _________________ _________________ _______________
5. ______________ _________________ _________________ _______________
6. ______________ _________________ _________________ _______________
7. ______________ _________________ _________________ _______________
8. ______________ _________________ _________________ _______________
9. ______________ _________________ _________________ _______________
10.______________ _________________ _________________ _______________
11.______________ _________________ _________________ _______________
12.______________ _________________ _________________ _______________
13.______________ _________________ _________________ _______________
14.______________ _________________ _________________ _______________
15.______________ _________________ _________________ _______________
NOTES:
1. If one or more Orders covering in the aggregate more than the outstanding
principal amount of Auction Rate Notes held by any Existing Owner are
submitted, such Orders shall be considered valid in the order of priority
set forth in the Auction Procedures.
2. A Hold or Sell Order may be placed only by an Existing Owner covering a
principal account of Auction Rate Notes not greater than the principal
amount currently held by such Existing Owner.
3. Potential Owners may only make Bids, each of which must specify a rate. If
more than one Bid is submitted on behalf of any Potential Owner, each Bid
submitted shall be a separate Bid with the rate specified.
B-2
Broker-Dealer Agreement (Xxxxx)
4. Bids may contain no more than three figures to the right of the decimal
point (.001 of 1%).
5. An order must be submitted in principal amounts of $50,000 or integral
multiples thereof.
*Potential Owners may be described by name or other reference as determined in
the sole discretion of the Broker-Dealer.
NAME OF BROKER-DEALER:
----------------------------------------------------------
AUTHORIZED SIGNATURE:
-----------------------------------------------------------
TOTAL NUMBER OF ORDERS ON THIS ORDER FORM:
--------------------------------------
Submit to: Deutsche Bank Trust Company Americas
Corporate Trust & Agency Services
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone Number: 000.000.0000
Facsimile Number: 212.454.2030
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Broker-Dealer Agreement (Xxxxx)
EXHIBIT C TO BROKER-DEALER AGREEMENT
------------------------------------
EDUCATION FUNDING CAPITAL TRUST-III
Education Loan Backed Notes, Series A-4
NOTICE OF TRANSFER
------------------
(To be used only for transfers made
other than pursuant to an Auction)
We are (check one)
the Existing Owner indicated below*; or
the Broker-Dealer for such Existing Owner; or
the Participant for such Existing Owner.
We hereby notify you that such Existing Owner has transferred $___________ (must
be in units of $50,000 or integral multiples thereof) of Series A-4 Notes to
________________________
(Existing Owner)
XXXXXXX X. XXXXX & CO.
(Name of Participant)
By:
-------------------------------------
Printed Name:
---------------------------
Title:
----------------------------------
*Existing Owners may be described by name or other reference as determined in
the sole discretion of the Broker-Dealer.
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Broker-Dealer Agreement (Xxxxx)
EXHIBIT D TO BROKER-DEALER AGREEMENT
------------------------------------
EDUCATION FUNDING CAPITAL TRUST-III
Education Loan Backed Notes, Series A-4
NOTICE OF FAILURE TO DELIVER OR MAKE PAYMENT
--------------------------------------------
COMPLETE EITHER I OR II.
-----------------------
I. We are a Broker-Dealer for ________* (the "Purchaser"), which
purchased $________________ (must be in units of $50,000 or
integral multiples thereof) of the Series A-4 Notes in the
Auction held on _________________ from the seller of such Series
A-4 Notes.
II. We are a Broker-Dealer for ____________* (the "Seller"), which
sold $__________________ (must be in units of $50,000 or integral
multiples thereof) of the Series A-4 Notes in the Auction held on
_____________________ to the purchaser of such Series A-4 Notes.
We hereby notify you that (check one) -
the Seller failed to deliver such Series A-4 Notes to the Purchaser.
the Purchaser failed to make payment to the Seller upon delivery of
such Series A-4 Notes.
XXXXXXX X. XXXXX & CO.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
*May be described by name or reference and as determined in the sole discretion
of the Broker-Dealer
D-1
Broker-Dealer Agreement (Xxxxx)
