EXHIBIT 10.117
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BROKER-DEALER AGREEMENT
among
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
and
UFS SECURITIES, L.L.C.,
as Co-Broker-Dealers
and
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Auction Agent
Relating to:
$19,700,000
MELMAC LLC
Senior Student Loan Revenue Bonds
(Taxable Auction Rate Securities)
Series 1999A-3
Auction Rate Securities
Maturing December 1, 2029
Dated as of October 15, 2002
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.01. Terms Defined by Reference to the Indenture .......................................... 1
Section 1.02. Terms Defined Herein ................................................................. 2
Section 1.03. Rules of Construction ................................................................ 2
ARTICLE II
THE AUCTION
Section 2.01. Purpose: Incorporation by Reference of Auction Procedures and Settlement Procedures .. 3
Section 2.02. Preparation for Each Auction ......................................................... 3
Section 2.03. Auction Schedule: Method of Submission of Orders ..................................... 4
Section 2.04. Notices .............................................................................. 6
Section 2.05. Service Charge To Be Paid to the Broker-Dealer ....................................... 6
Section 2.06. Settlement ........................................................................... 7
ARTICLE III
THE AUCTION AGENT
Section 3.01. Duties and Responsibilities .......................................................... 7
Section 3.02. Rights of the Auction Agent .......................................................... 8
Section 3.03. The Auction Agent's Disclaimer ....................................................... 8
ARTICLE IV
MISCELLANEOUS
Section 4.01. Termination .......................................................................... 9
Section 4.02. Participant .......................................................................... 9
Section 4.03. Communications ....................................................................... 9
Section 4.04. Entire Agreement ..................................................................... 10
Section 4.05. Benefits ............................................................................. 10
Section 4.06. Amendment; Waiver .................................................................... 10
Section 4.07. Successors and Assigns ............................................................... 11
Section 4.08. Severability ......................................................................... 11
Section 4.09. Execution in Counterparts ............................................................ 11
ARTICLE V
GOVERNING LAW......................................................................................... 11
EXHIBIT A SETTLEMENT PROCEDURES
EXHIBIT B ORDER FORM
EXHIBIT C NOTICE OF TRANSFER
EXHIBIT D NOTICE OF A FAILURE TO DELIVER OR MAKE PAYMENT
ii
BROKER-DEALER AGREEMENT
THIS BROKER-DEALER AGREEMENT (this "Broker-Dealer Agreement"), dated as
of October 15, 2002, is by and between DEUTSCHE BANK TRUST COMPANY AMERICAS
(formerly known as Bankers Trust Company and 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 MELMAC LLC (as assignee of Maine Educational Loan
Marketing Corporation) (the "Corporation"), ▇.▇. ▇▇▇▇▇▇ SECURITIES INC. and UFS
SECURITIES, L.L.C. (together with their successors and assigns, collectively the
"Broker-Dealer").
RECITALS
WHEREAS, the Corporation has issued its $19,700,000 Senior Student Loan
Revenue Bonds, Series 1999A-3 (the "Auction Rate Securities"), under an Amended
and Restated Indenture of Trust, dated as of January 1, 1999, as amended and
supplemented to the date hereof (the "Indenture"), each between the Corporation
and Banknorth, National Association (formerly known as Peoples Heritage Bank),
as trustee (the "Trustee"); and
WHEREAS, the Indenture provides that the interest rate for each series
of the Auction Rate Securities for each Interest Period after the Initial Period
shall equal the lesser of the Net Loan Rate and the Auction Rate determined
pursuant to the Auction Procedures set forth in the Indenture; and
WHEREAS, pursuant to Section 2.10(b) of the Indenture and Section 2.09
of the Auction Agent Agreement dated as of January l, 1999 among the Trustee,
the Auction Agent and the Corporation (the "Auction Agent Agreement"), the
Corporation has directed the Auction Agent to execute and deliver this
Broker-Dealer Agreement; and
WHEREAS, 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 Corporation and
the Broker-Dealer agree as follows:
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
SECTION 1.01. 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.
SECTION 1.02. 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 Rate" means the Auction Rate as defined in the Indenture.
"Authorized Officer" means, with respect to the Auction Agent, each
Managing Director, Vice President, Assistant Vice President, Assistant
Secretary, Assistant Treasurer and every other officer of the Auction Agent
assigned to its Corporate Trust Group and every other officer or employee of the
Auction Agent designated as an "Authorized Officer" for purposes of this
Agreement in a written communication to the Broker-Dealer.
"Broker-Dealer Officer" means each officer or employee of the
Broker-Dealer designated as a "Broker-Dealer Officer" for purposes of this
Broker-Dealer Agreement in a written communication to the Auction Agent.
"Beneficial Owner" means a beneficial owner of any of the Auction Rate
Securities.
"Notice of Failure to Deliver or Make Payment" means a notice
substantially in the form of Exhibit D hereto.
"Notice of Transfer" means a notice substantially in the form of
Exhibit C hereto.
"Order Form" means the form to be submitted by any Broker-Dealer on or
prior to any Rate Determination Date substantially in the form of Exhibit B
hereto.
"Settlement Procedures" means the Settlement Procedures attached hereto
as Exhibit A.
SECTION 1.03. 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
Broker-Dealer Agreement nor shall they affect its meaning, construction
or effect.
(c) The words "hereof," "herein," "hereto" and other words of
similar import refer to this Broker-Dealer Agreement as a whole.
(d) All references herein to a particular time of day shall be
to New York City time.
(e) The rights and duties of the Broker-Dealer and the Auction
Agent under this Broker-Dealer Agreement shall apply to each series of
the Auction Rate Securities, but separately. References to "Auction
Rate Securities," unless the context clearly
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contemplates a reference to all Auction Rate Securities, shall refer
only to a particular series of Auction Rate Securities as to rights and
duties regarding such series.
ARTICLE II
THE AUCTION
SECTION 2.01. PURPOSE: INCORPORATION BY REFERENCE OF AUCTION PROCEDURES
AND SETTLEMENT PROCEDURES.
(a) On each Rate Determination 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 Broker-Dealer
Agreement to the same extent as if such provisions were fully set forth
herein.
(c) The Broker-Dealer agrees to act as, and assumes the
obligations of and limitations and restrictions placed upon, a
Broker-Dealer under this Agreement. The Broker-Dealer understands that
other persons meeting the requirements specified in the definition of
"Broker-Dealer" contained in Section 1.01 of Exhibit CCC to the
Indenture may, with the prior written consent of the Market Agent,
execute Broker-Dealer Agreements and participate as Broker-Dealers in
Auctions.
(d) The Broker-Dealer and other broker-dealers, as defined in
the Indenture, may participate in Auctions for their own accounts.
However, the Auction Agent may by notice to the Broker-Dealer and all
other Broker-Dealers prohibit all Broker-Dealers from submitting Bids
in Auctions for their own accounts; provided that Broker-Dealers may
continue to submit Hold Orders and Sell Orders. The Auction Agent shall
have no duty or liability with respect to monitoring or enforcing the
requirements of this Section 2.01(d).
SECTION 2.02. PREPARATION FOR EACH AUCTION.
(a) Not later than 9:30 a.m. on each Rate Determination Date
for the Auction Rate Securities, the Auction Agent shall advise the
Broker-Dealer by telephone of the All Hold Rate, the Maximum Auction
Rate, the Net Loan Rate and the Applicable LIBOR Rate, as the case may
be, used in determining such rates.
(b) In the event the Rate Determination Date for any Auction
shall be changed after the Auction Agent has given notice of such Rate
Determination Date pursuant to paragraph (a)(vii) 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 Rate Determination Date
and 9:15 a.m. on the old Rate Determination Date. Thereafter, the
Broker-Dealer shall use its best
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efforts to promptly notify its customers who are Existing Holders of
such change in the Rate Determination 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 Securities held by the
Broker-Dealer as an Existing Holder. The Broker-Dealer shall comply
with any such request, and the Auction Agent shall keep confidential
any such information, including information received as to the identity
of Existing Owners and Potential Owners in any Auction, and shall not
disclose any such information so provided to any person other than the
Registrar, the Corporation and the Broker-Dealer unless the failure to
disclose such information would be unlawful or if the failure to do so
would expose the Auction Agent to any loss, liability, claim or damage
for which the Auction Agent shall not have been previously adequately
indemnified.
(d) The Auction Agent shall send by facsimile or other means a
copy of any Notice of Auction Rate Securities Outstanding, in
substantially the form of Exhibit D to the Auction Agent Agreement,
received from the Trustee to the Broker-Dealer in accordance with
Section 4.03 hereof.
SECTION 2.03. AUCTION SCHEDULE: METHOD OF SUBMISSION OF ORDERS.
(a) The Auction Agent shall conduct Auctions for the Auction
Rate Securities 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 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 next preceding the first Rate Determination Date on
which such change shall be effective. In addition, under the Indenture,
the Rate Determination Date may be changed by the Market Agent with the
consent of the Corporation. The Market Agent shall give written notice
of such change to the Corporation, the Trustee, the Auction Agent and
the Depository. Such notice shall be given at least 10 days prior to
the day on which such change shall be effective.
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By 9:30 a.m. The Auction Agent advises the
Trustee and the Broker-Dealers of the
Maximum Auction Rate, the All Hold Rate and
the Applicable LIBOR Rate, as the case may
be, to be used in determining the Auction
Rate under the Auction Procedures, the
Indenture and the Auction Agent Agreement.
9:30 a.m.-12:30 p.m. The Auction Agent assembles information
communicated to it by Broker-Dealers
provided in Section 2.05(c)(i) of Exhibit
CCC to the Indenture. The Submission
Deadline is 12:30 p.m., eastern time.
Not earlier than 12:30 p.m. The Auction Agent makes determinations
pursuant to Section 2.05(c)(i) of Exhibit
CCC to the Indenture.
By approximately The Auction Agent advises the Trustee of the
3:00 p.m.(1) or 4:00 p.m.(2) results of the Auction as provided in
Section 2.05(c)(ii) of Exhibit CCC to the
Second Supplemental Indenture. Submitted
Bids and Submitted Sell Orders are accepted
and rejected in whole or in part and the
principal amount of Auction Rate Securities
is allocated as provided in Section 2.05(d)
of Exhibit CCC to the Indenture. The Auction
Agent gives notice of Auction results as set
forth in Section 2.04(a) hereof.
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(1) If the Interest Rate is the Auction Rate.
(2) If the Interest Rate is the Net Loan Rate.
(b) The Broker-Dealer agrees to maintain a list of Potential
Holders and to contact the Potential Holders on such list on or prior
to each Rate Determination Date for the purposes of participating in
the Auction on such Rate Determination 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 Holder or
Existing Holders on whose behalf the Broker-Dealer is submitting an
Order and shall not net or aggregate the Orders of different Potential
Holders or Existing Holders 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
Securities made through the Broker-Dealer by an Existing Holder 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 Securities to be transferred to or payment to be made by
any person that purchased or sold Auction Rate Securities 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 Rate Determination Date.
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(e) Any Broker-Dealer that is an affiliate of the Corporation
must submit at the next Auction therefor a Sell Order covering all
Auction Rate Securities 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 2.03(e).
(f) The Broker-Dealer agrees to handle its customers' Orders
in accordance with its duties under applicable securities laws and
rules.
SECTION 2.04. NOTICES.
(a) On each Rate Determination 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 Rate
Determination Date, the Broker-Dealer in writing of the disposition of
all Orders submitted by the Broker-Dealer in the Auction held on such
Rate Determination Date.
(b) The Broker-Dealer shall notify each Existing Holder or
Potential Holder 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. ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., as
the sole Broker-Dealer, shall also notify the Corporation, in writing,
of the Interest Rate within a reasonable time (not in excess of two
Business Days) after the determination thereof.
(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 Article II of the
Auction Agent Agreement at the times and in the manner set forth in the
Auction Agent Agreement.
SECTION 2.05. SERVICE CHARGE TO BE PAID TO THE BROKER-DEALER. With
respect to each Auction for which there were Sufficient Clearing Bids or all
Auction Rate Securities were subject to Hold Orders, the Broker-Dealer shall be
entitled to a fee in an amount equal to the product of (a) a fraction the
numerator of which is the number of days in the Auction Period to which the
Auction relates and the denominator of which is 360; times (b) the Broker-Dealer
Fee Rate; times (c) the sum of (i) the aggregate principal amount of Auction
Rate Securities placed by the Broker-Dealer in such Auction that were (A) the
subject of Submitted Bids of Existing Holders submitted by the Broker-Dealer and
continued to be held as a result of such submission; and (B) the subject of
Submitted Bids of Potential Holders submitted by the Broker-Dealer and purchased
as a result of such submission; plus (ii) the aggregate principal amount of
Auction Rate Securities subject to valid Hold Orders submitted to the Auction
Agent by the Broker-Dealer; plus (iii) the aggregate principal amount of Auction
Rate Securities that were covered by Hold Orders deemed to have been submitted
by Existing Holders that were acquired by such Existing Holders through the
Broker-Dealer. Such fees shall be paid to the Broker-Dealer by the Corporation
in immediately available funds from amounts in the Operating Fund on the first
Business Day following each Rate Determination Date. For purposes of clause
(c)(iii) above, if any Existing Holder who acquired Auction Rate Securities
through the
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Broker-Dealer transfers those Auction Rate Securities to another person other
than pursuant to an Auction, then the Broker-Dealer shall continue to be the
Broker-Dealer through which the Auction Rate Securities so transferred were
acquired; provided, however, that if the transfer was effected by, or if the
transferee is a Broker-Dealer other than the Broker-Dealer, then such other
Broker-Dealer shall be the Broker-Dealer through which such Auction Rate
Securities were acquired. If for any reason an Auction is not held on an Auction
Date, there shall be no Broker-Dealer Fee applicable with respect to such
Auction Date.
Notwithstanding anything to the contrary herein or in the Indenture,
any obligation of the Corporation created by or arising out of this
Broker-Dealer Agreement shall be a limited obligation of the Corporation,
payable from the Trust Estate available therefor under and in accordance with
the Indenture and from the Operating Fund (as defined in the Indenture), and
shall not constitute a charge against the general credit of the Corporation.
SECTION 2.06. SETTLEMENT.
(a) If any Existing Holder on whose behalf the Broker-Dealer
has submitted a Bid or Sell Order for Auction Rate Securities that was
accepted in whole or in part fails to instruct its Participant to
deliver the Auction Rate Securities subject to such Bid or Sell Order
against payment therefor, the Broker-Dealer shall instruct such
Participant to deliver such Auction Rate Securities against payment
therefor and the Broker-Dealer may deliver to the Potential Holder on
whose behalf the Broker-Dealer submitted a Bid that was accepted in
whole or in part, a principal amount of the Auction Rate Securities
that is less than the principal amount of the Auction Rate Securities
specified in such Bid to be purchased by such Potential Holder.
Notwithstanding the foregoing terms of this Section, any delivery or
nondelivery of Auction Rate Securities 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 2.03(d) hereof. The Auction Agent shall have no duty
or liability with respect to enforcement of this Section 2.06(a).
(b) None of the Auction Agent, the Trustee, nor the
Corporation shall have any responsibility or liability with respect to
the failure of an Existing Holder, a Potential Holder or its respective
Participant to deliver Auction Rate Securities or to pay for Auction
Rate Securities 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 2.05 hereof as a result
of any failure described in this Section 2.06(b).
ARTICLE III
THE AUCTION AGENT
SECTION 3.01. DUTIES AND RESPONSIBILITIES.
(a) The Auction Agent is acting hereunder solely as agent for
the Corporation and owes no fiduciary duties to any person by reason of
this Broker-Dealer Agreement.
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(b) The Auction Agent undertakes to perform such duties and
only such duties as are specifically set forth in this Broker-Dealer
Agreement, and no implied covenants or obligations shall be read into
this Broker-Dealer Agreement against the Auction Agent by reason of
anything set forth in the Offering Memorandum, any other offering
material employed in connection with the offering and sale of the
Auction Rate Securities, or otherwise.
(c) In the absence of bad faith or negligence on its part, the
Auction Agent shall not be liable for any action taken, suffered or
omitted or for any error of judgment made by it in the performance of
its duties under this Broker-Dealer Agreement. The Auction Agent shall
not be liable for any error of judgment made in good faith unless the
Auction Agent shall have been negligent in ascertaining (or failing to
ascertain) the pertinent facts.
SECTION 3.02. RIGHTS OF THE AUCTION AGENT.
(a) The Auction Agent may rely and shall be protected in
acting or refraining from acting upon any communication authorized by
this Broker-Dealer Agreement and upon any written instruction, notice,
request, direction, consent, report, certificate, share certificate or
other instrument, paper or document believed by it to be genuine. The
Auction Agent shall not be liable for acting upon any telephone
communication authorized by this Broker-Dealer Agreement which the
Auction Agent believes in good faith to have been given by the Trustee,
a Broker-Dealer or the Corporation. 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.
SECTION 3.03. THE AUCTION AGENT'S DISCLAIMER. The Auction Agent makes
no representation as to the validity, adequacy or accuracy of the recitals in,
or the validity, adequacy or accuracy of, this Broker-Dealer Agreement, the
Auction Agent Agreement or the Auction Rate Securities.
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ARTICLE IV
MISCELLANEOUS
SECTION 4.01. TERMINATION. Any party may terminate this Broker-Dealer
Agreement at any time upon five days' prior notice to the other party. This
Broker-Dealer Agreement shall automatically terminate upon the delivery of
certificates representing the Auction Rate Securities pursuant to Section
1.02(c) of Exhibit CCC to the Indenture, upon the successful conversion of all
Auction Rate Securities to other than an Auction Rate, or upon termination of
the Auction Agent Agreement.
SECTION 4.02. PARTICIPANT. The Broker-Dealer is, and shall remain for
the term of this Broker-Dealer Agreement, a member of, or Participant in, the
Depository (or an affiliate of such a member or Participant).
SECTION 4.03. COMMUNICATIONS. Except for (a) communications authorized
to be made by telephone pursuant to this Broker-Dealer Agreement or the Auction
Procedures and (b) 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: ▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
If to the Broker-Dealer: UFS Securities, L.L.C.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Auction Agent: Deutsche Bank Trust Company Americas
▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust & Agency Services
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If to the Trustee: Banknorth, National Association
▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust Department
If to the Corporation: MELMAC LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: MELMAC LLC
c/o Nelnet, Inc.
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Vice President
or such other address or facsimile number as such party may hereafter specify
for such purpose by notice to the other party. Each such notice, request or
communication shall be effective when delivered at the address specified herein.
Communications shall be given on behalf of the Broker-Dealer by a Broker-Dealer
Officer and on behalf of the Auction Agent by an Authorized Officer of the
Auction Agent. The Broker-Dealer may record telephone communications with the
Auction Agent.
SECTION 4.04. ENTIRE AGREEMENT. This Broker-Dealer 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.
SECTION 4.05. BENEFITS. Nothing in this Broker-Dealer Agreement,
express or implied, shall give to any person, other than the Auction Agent and
the Broker-Dealer and their respective successors and assigns, any benefit of
any legal or equitable right, remedy or claim under this Broker-Dealer
Agreement.
SECTION 4.06. AMENDMENT; WAIVER.
(a) This Broker-Dealer Agreement shall not be deemed or
construed to be modified, amended, rescinded, canceled or waived, in
whole or in part, except by a written instrument signed by a duly
authorized representative of the parties hereto. This Broker-Dealer
Agreement may not be amended without first obtaining the prior written
consent of the party to be charged.
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(b) Failure of either party to this Broker-Dealer Agreement to
exercise any right or remedy hereunder in the event of a breach of this
Broker-Dealer Agreement by the other party shall not constitute a
waiver of any such right or remedy with respect to any subsequent
breach.
SECTION 4.07. SUCCESSORS AND ASSIGNS. This Broker-Dealer 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. This Agreement may not be assigned by either party hereto absent the
prior written consent of the other party; provided, however, that this Agreement
may be assigned by the Auction Agent to a successor Auction Agent selected by
the Trustee and the Corporation without the consent of the Broker-Dealer.
SECTION 4.08. SEVERABILITY. If any clause, provision or section of this
Broker-Dealer Agreement shall be ruled invalid or unenforceable by any court of
competent jurisdiction, the invalidity or unenforceability of such clause,
provision or section shall not affect any remaining clause, provision or section
hereof.
SECTION 4.09. EXECUTION IN COUNTERPARTS. This Broker-Dealer Agreement
may be executed in several counterparts, each of which shall be an original and
all of which shall constitute but one and the same instrument.
ARTICLE V
GOVERNING LAW
This Broker-Dealer 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.
11
IN WITNESS WHEREOF, the parties hereto have caused this Broker-Dealer
Agreement to be duly executed and delivered by their proper and duly authorized
officers and effective as of October 15, 2002.
DEUTSCHE BANK TRUST COMPANY
AMERICAS, as Auction Agent
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇.
____________________________________
Name ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇.
__________________________________
Title Vice President
_________________________________
▇.▇. ▇▇▇▇▇▇ SECURITIES INC., as Co-
Broker-Dealer
By /s/ ▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
____________________________________
▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇, Vice President
UFS SECURITIES, L.L.C., as Co-Broker-
Dealer
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
____________________________________
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
Acknowledged and Agreed to:
MELMAC LLC
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
___________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
12
EXHIBIT A
SETTLEMENT PROCEDURES
If not otherwise defined herein, capitalized terms used herein shall
have the meanings given such terms in the Indenture. These Settlement Procedures
shall apply separately to each series of Auction Rate Securities.
(a) Not later than 3:00 p.m., Eastern time, if the Interest
Rate is the Auction Rate or 4:00 p.m., Eastern time, if the Interest
Raise is the Net Loan Rate, on each Rate Determination Date, the
Auction Agent shall notify by telephone each Broker-Dealer that
participated in the Auction held on such Rate Determination Date and
submitted an Order on behalf of an Existing Holder or Potential Holder
of:
(i) the Auction Rate fixed for the next Interest
Period;
(ii) whether there were Sufficient Clearing Bids in
such Auction;
(iii) if such Broker-Dealer (a "Seller's
Broker-Dealer") submitted Bids or Sell Orders on behalf of an
Existing Holder, whether such Bid or Sell Order was accepted
or rejected, in whole or in part, and the principal amount of
Auction Rate Securities, if any, to be purchased or sold by
such Existing Holder;
(iv) if such Broker-Dealer (a "Buyer's
Broker-Dealer") submitted a Bid on behalf of a Potential
Holder, whether such Bid was accepted or rejected, in whole or
in part, and the principal amount of Auction Rate Securities,
if any, to be purchased by such Potential Holder;
(v) if the aggregate amount of Auction Rate
Securities to be sold by all Existing Holders on whose behalf
such Seller's Broker-Dealer submitted Bids or Sell Orders
exceeds the aggregate principal amount of Auction Rate
Securities to be purchased by all Potential Holders 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 Securities and the principal amount of
Auction Rate Securities to be purchased from one or more
Existing Holders on whose behalf such Seller's Broker-Dealer
acted by one or more Potential Holders on whose behalf each of
such Buyer's Broker-Dealers acted;
(vi) if the principal amount of Auction Rate
Securities to be purchased by all Potential Holders on whose
behalf such Buyer's Broker-Dealer submitted a Bid exceeds the
amount of Auction Rate Securities to be sold by all Existing
Holders 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
Securities and the
principal amount of Auction Rate Securities to be sold to one
or more Potential Holders on whose behalf such Buyer's
Broker-Dealer acted by one or more Existing Holders on whose
behalf each of such Seller's Broker-Dealers acted; and
(vii) the Rate Determination Date for the next
succeeding Auction.
(b) On each Rate Determination Date, each Broker-Dealer that
submitted an Order on behalf of any Existing Holder or Potential Holder
shall:
(i) advise each Existing Holder and Potential Holder
on whose behalf such Broker-Dealer submitted a Bid or Sell
Order in the Auction on such Rate Determination 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 Holder on whose behalf
such Buyer's Broker-Dealer submitted a Bid that was accepted,
in whole or in part, to instruct such Potential Holder's
Participant to pay to such Buyer's Broker-Dealer (or its
Participant) through the Depository the amount necessary to
purchase the principal amount of the Auction Rate Securities
to be purchased pursuant to such Bid against receipt of such
Auction Rate Securities;
(iii) in the case of a Broker-Dealer that is a
Seller's Broker-Dealer, instruct each Existing Holder 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 Holder's
Participant to deliver to such Seller's Broker-Dealer (or its
Participant) through the Depository the principal amount of
Auction Rate Securities to be sold pursuant to such Order
against payment therefor;
(iv) advise each Existing Holder on whose behalf such
Broker-Dealer submitted an Order and each Potential Holder on
whose behalf such Broker-Dealer submitted a Bid of the
Interest Rate for the next Interest Period;
(v) advise each Existing Holder on whose behalf such
Broker-Dealer submitted an Order of the next Rate
Determination Date; and
(vi) advise each Potential Holder on whose behalf
such Broker-Dealer submitted a Bid that was accepted, in whole
or in part, of the next Rate Determination 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 Securities received by it in connection with such
Auction pursuant to paragraph (b)(iii) above, among the Potential
Holders, if any, on whose behalf such Broker-Dealer submitted Bids, the
Existing Holders, if any on whose behalf such Broker-Dealer submitted
Bids or Sell Orders in such Auction, and any
A-2
Broker-Dealers identified to it by the Auction Agent following such
Auction pursuant to paragraph (a)(v) or (a)(vi) above.
(d) On each Rate Determination Date:
(i) each Potential Holder and Existing Holder with an
Order in the Auction on such Rate Determination Date will
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 Depository will instruct its Participant to
(A) pay through the Depository to the Participant of the
Existing Holder delivering Auction Rate Securities to such
Broker-Dealer following such Auction pursuant to paragraph
(b)(ii) above the amount necessary to purchase such Auction
Rate Securities against receipt of such Auction Rate
Securities; and (B) deliver such Auction Rate Securities
through the Depository to a Buyer's Broker-Dealer (or its
Participant) identified to such Seller's Broker-Dealer
pursuant to paragraph (a)(v) above against payment therefor;
and
(iii) each Buyer's Broker-Dealer that is not an
Participant in the Depository will instruct its Participant to
pay through the Depository to Seller's Broker-Dealer (or its
Participant) identified following such Auction pursuant to
paragraph (a)(vi) above the amount necessary to purchase the
Auction Rate Securities to be purchased pursuant to paragraph
(b)(ii) above against receipt of such Auction Rate Securities.
(e) On the Business Day following each Rate Determination
Date:
(i) each Participant for a Bidder in the Auction on
such Rate Determination Date referred to in paragraph (d)(i)
above will instruct the Depository to execute the transactions
described under paragraph (b)(ii) or paragraph (b)(iii) above
for such Auction, and the Depository will execute such
transactions;
(ii) each Seller's Broker-Dealer or its Participant
will instruct the Depository to execute the transactions
described in paragraph (d)(ii) above for such Auction, and the
Depository will execute such transactions; and
(iii) each Buyer's Broker-Dealer or its Participant
will instruct the Depository to execute the transactions
described in paragraph (d)(iii) above for such Auction, and
the Depository will execute such transactions.
(f) If an Existing Holder selling Auction Rate Securities in
an Auction fails to deliver such Auction Rate Securities (by authorized
book-entry), a Broker-Dealer may deliver to the Potential Holder on
behalf of which it submitted a Bid that was accepted a principal amount
of Auction Rate Securities that is less than the principal amount of
Auction Rate Securities that otherwise was to be purchased by such
Potential Holder. In such event, the principal amount of Auction Rate
Securities to be so delivered will be
A-3
determined solely by such Broker-Dealer. Delivery of such lesser
principal amount of Auction Rate Securities will constitute good
delivery. Notwithstanding the foregoing terms of this paragraph (f),
any delivery or nondelivery of Auction Rate Securities which will
represent any departure from the results of an Auction, as determined
by the Auction Agent, will be of no effect unless and until the Auction
Agent will 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 Trustee nor the Auction Agent
will have any responsibility or liability with respect to the failure
of a Potential Holder, Existing Holder or their respective
Broker-Dealer or Participant to take delivery of or deliver, as the
case may be, the principal amount of the Auction Rate Securities or to
pay for the Auction Rate Securities purchased or sold pursuant to an
Auction or otherwise.
A-4
EXHIBIT B
ORDER FORM
$19,700,000
MELMAC LLC
Senior Student Loan Revenue Bonds
(Taxable Auction Rate Securities)
Series 1999A-3
[Rate Determination Date]
The undersigned Broker-Dealer submits the following orders on behalf of
the Bidder(s) indicated below:
BIDS BY EXISTING HOLDERS
PRINCIPAL AMOUNT
OF NOTES ($50,000 OR INTEGRAL
EXISTING HOLDER* MULTIPLES THEREOF) BID RATE
1. ________________ _____________________________ ________
2. ________________ _____________________________ ________
3. ________________ _____________________________ ________
4. ________________ _____________________________ ________
5. ________________ _____________________________ ________
6. ________________ _____________________________ ________
7. ________________ _____________________________ ________
8. ________________ _____________________________ ________
9. ________________ _____________________________ ________
10. ________________ _____________________________ ________
--------------------
*Existing Holders may be described by name or other reference as determined in
the sole discretion of the Broker-Dealer.
$19,700,000
MELMAC LLC
Senior Student Loan Revenue Bonds
(Taxable Auction Rate Securities)
Series 1999A-3
BIDS BY POTENTIAL HOLDERS
PRINCIPAL AMOUNT
OF NOTES ($50,000 OR INTEGRAL
POTENTIAL HOLDER* MULTIPLES THEREOF) BID RATE
1. ________________ _____________________________ ________
2. ________________ _____________________________ ________
3. ________________ _____________________________ ________
4. ________________ _____________________________ ________
5. ________________ _____________________________ ________
6. ________________ _____________________________ ________
7. ________________ _____________________________ ________
8. ________________ _____________________________ ________
9. ________________ _____________________________ ________
10. ________________ _____________________________ ________
11. ________________ _____________________________ ________
12. ________________ _____________________________ ________
13. ________________ _____________________________ ________
14. ________________ _____________________________ ________
15. ________________ _____________________________ ________
B-2
--------------------
*Potential Holders may be described by name or other reference as determined in
the sole discretion of the Broker-Dealer.
1. If one or more Orders covering in the aggregate more than the outstanding
principal amount of Auction Rate Securities held by any Existing Holder 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 Holder covering a
principal account of Auction Rate Securities not greater than the principal
amount currently held by such Existing Holder.
3. Potential Holders may only make Bids, each of which must specify a rate. If
more than one Bid is submitted on behalf of any Potential Holder, each Bid
submitted shall be a separate Bid with the rate specified.
4. Bids may contain no more than three figures to the right of the decimal point
(i.e., .001 of 1%).
5. An order must be submitted in principal amounts of $50,000 or integral
multiples thereof.
NAME OF BROKER-DEALER:__________________________________________________________
AUTHORIZED SIGNATURE:___________________________________________________________
TOTAL NUMBER OF ORDERS ON THIS ORDER FORM:______________________________________
Submit to: Deutsche Bank Trust Company Americas
▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
B-3
EXHIBIT C
NOTICE OF TRANSFER
$19,700,000
MELMAC LLC
Senior Student Loan Revenue Bonds
(Taxable Auction Rate Securities)
Series 1999A-3
(To be used only for transfers made
other than pursuant to an Auction)
We are (check one):
_____ the Existing Holder indicated below*;
_____ the Broker-Dealer for such Existing Note Holder; or
_____ the Participant for such Existing Note Holder.
We hereby notify you that such Existing Holder has transferred
$_________ (must be in units of $50,000 or integral multiples thereof) of Series
__________ Notes to ____________________.
[EXISTING HOLDER]
By_________________________
Name_______________________
Title______________________
[NAME OF BROKER-DEALER]
By_________________________
Name_______________________
Title______________________
----------------------
* Existing Holders may be described by name or other reference as determined in
the sole discretion of the Broker-Dealer.
[NAME OF PARTICIPANT]
By_________________________
Name_______________________
Title______________________
C-2
EXHIBIT D
NOTICE OF A FAILURE TO DELIVER OR MAKE PAYMENT
$19,700,000
MELMAC LLC
Senior Student Loan Revenue Bonds
(Taxable Auction Rate Securities)
Series 1999A-3
Complete either I. or II.
I. We are a Broker-Dealer for Holder* ____________________ (the
"Purchaser"), which purchased $__________ (must be in units of
$50,000 or integral multiples thereof) of __________ in the
Auction held on __________ from the seller of such Series
_____ Notes.
II. We are a Broker-Dealer for Holder* ____________________ (the
"Seller"), which sold $__________ (must be in units of $50,000
or integral multiples thereof) of the Series First Issue in
the Auction held on __________ to the purchaser of such Series
_____ Notes.
We hereby notify you that (check one):
_____ the Seller failed to deliver such Series _____ Notes to the
Purchaser; or
_____ the Purchaser failed to make payment to the Seller upon delivery
of such Series _____ Notes.
[NAME OF BROKER-DEALER]
By______________________
Name____________________
Title___________________
---------------------
* Existing Holders may be described by name or other reference as determined in
the sole discretion of the Broker-Dealer.
* Existing Holders may be described by name or other reference as determined in
the sole discretion of the Broker-Dealer.
