EXHIBIT 10.109
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BROKER-DEALER AGREEMENT
among
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Auction Agent,
NELNET STUDENT LOAN CORPORATION-1,
as Issuer
and
BANC OF AMERICA SECURITIES LLC,
as Broker-Dealer
Relating to
NELNET Student Loan Corporation-1
Taxable Student Loan Asset-Backed Notes
$75,500,000 Senior Class 1996A-6 Auction Rate Securities(sm) (ARS(sm))
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 ................................................................ 1
Section 1.03. Rules of Construction ............................................................... 2
ARTICLE II
THE AUCTION
Section 2.01. Purpose: Incorporation by Reference of Auction Procedures and Settlement Procedures.. 2
Section 2.02. Preparation for Each Auction ........................................................ 3
Section 2.03. Auction Schedule: Method of Submission of Orders .................................... 3
Section 2.04. Notices ............................................................................. 5
Section 2.05. Service Charge to Be Paid to BD ..................................................... 5
Section 2.06. Settlement .......................................................................... 6
ARTICLE III
THE AUCTION AGENT
Section 3.01. Duties and Responsibilities ......................................................... 6
Section 3.02. Rights of the Auction Agent ......................................................... 7
ARTICLE IV
MISCELLANEOUS
Section 4.01. Termination ......................................................................... 7
Section 4.02. Participant in Depository ........................................................... 7
Section 4.03. Communications ...................................................................... 8
Section 4.04. Entire Agreement .................................................................... 8
Section 4.05. Benefits ............................................................................ 8
Section 4.06. Amendment: Waiver ................................................................... 8
Section 4.07. Successors and Assigns .............................................................. 9
Section 4.08. Severability ........................................................................ 9
Section 4.09. Execution in Counterparts ........................................................... 9
Section 4.10. Governing Law ....................................................................... 9
EXHIBIT A SETTLEMENT PROCEDURES
EXHIBIT B-1 ORDER FORM
EXHIBIT B-2 TRANSFER FORM
EXHIBIT C NOTICE OF A FAILURE TO DELIVER
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THIS BROKER-DEALER AGREEMENT dated as of October 15, 2002 among NELNET
STUDENT LOAN CORPORATION-1 (formerly known as Union Financial Services-1, Inc.)
("NELNET-1"), DEUTSCHE BANK TRUST COMPANY AMERICAS (formerly known as Bankers
Trust Company) (together with its successors and assigns, the "Auction Agent")
not in its individual capacity but solely as agent of Zions First National Bank,
as successor trustee (the "Trustee") under the Second Amended and Restated
Indenture of Trust dated as of November 1, 1996 (the "Indenture") and the Series
1996C Supplemental Indenture of Trust, dated as of November 1, 1996 (the
"Supplemental Indenture"), each by and between NELNET-1 and the Trustee pursuant
to authority granted to it in the Auction Agency Agreement dated as of November
1, 1996, among NELNET-1, the Trustee and the Auction Agent (the "Auction Agency
Agreement"), and BANC OF AMERICA SECURITIES LLC (together with its successors
and assigns hereinafter referred to as "BD").
NELNET-1 has issued $75,500,000 of its Taxable Student Loan
Asset-Backed Notes, Senior Class 1996A-6, maturing on July 1, 2014, as Auction
Rate Securities(sm) (the "ARS(sm)").
The Supplemental Indenture provides that the interest rate on the ARS
for each Interest Period after the Initial Period shall, except under certain
conditions, equal the Auction Rate which the Auction Agent advises as the result
of implementation of the Auction Procedures. Pursuant to Section 2.9 of the
Auction Agency Agreement, the Auction Agent has entered into 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, NELNET-1, the Auction Agent, as agent of the
Trustee, and BD agree as follows:
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
SECTION 1.01. TERMS DEFINED BY REFERENCE TO THE INDENTURE. Capitalized
terms not defined herein shall have the respective meanings specified in or
pursuant to the Indenture and the Auction Agency Agreement.
SECTION 1.02. TERMS DEFINED HEREIN. As used herein and in the
Settlement Procedures (as defined below), the following terms shall have the
following meanings, unless the context otherwise requires:
"Auction" shall have the meaning specified in Section 2.01 hereof.
"Auction Agency Agreement" shall mean the Auction Agency Agreement
dated as of November 1, 1996, among NELNET-1, the Trustee and the Auction Agent
relating to the ARS.
"Auction Procedures" shall mean the Auction Procedures that are set
forth in Appendix B to the Supplemental Indenture.
"Authorized Officer" shall mean each Managing Director, Vice President,
Assistant Vice President, Secretary, Assistant Secretary and Assistant Treasurer
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
Officer for purposes of this Agreement.
"BD Officer" shall mean each officer or employee of BD designated as a
"BD Officer" for purposes of this Agreement.
"Broker-Dealer Agreement" shall mean this Broker-Dealer Agreement and
any substantially similar agreement between the Auction Agent and a
Broker-Dealer.
"Holder" shall mean the beneficial owner of any ARS.
"Settlement Procedures" shall mean the Settlement Procedures attached
hereto as Exhibit A.
SECTION 1.03. RULES OF CONSTRUCTION. Unless the context or use
indicates another or different meaning or intent, the following rules shall
apply to the construction of this 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.
(d) All references herein to a particular time of day shall be
to New York City time.
ARTICLE II
THE AUCTION
SECTION 2.01. PURPOSE: INCORPORATION BY REFERENCE OF AUCTION PROCEDURES
AND SETTLEMENT PROCEDURES.
(a) On each Auction Date, the provisions of the Auction
Procedures will be followed by the Auction Agent for the purpose of
determining the Applicable ARS Rate for the next Interest Period. Each
periodic operation of such procedures is hereinafter referred to as an
"Auction."
(b) Without prejudice to Section 3.01(a) hereof, 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.
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(c) BD agrees to act as, and assumes the obligations of and
limitations and restrictions placed upon, a Broker-Dealer under this
Agreement. BD understands that other persons meeting the requirements
specified in the definition of "Broker-Dealer" contained in the
Indenture may, with the prior written consent of the Market Agent,
execute Broker-Dealer Agreements and participate as Broker-Dealers in
Auctions.
(d) BD and other Broker-Dealers may participate in Auctions
for their own accounts. However, the Auction Agent may by notice to BD
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).
(e) BD agrees to act as, and assumes the obligations of, and
limitations and restrictions placed upon, a Broker-Dealer under this
Broker-Dealer Agreement. BD agrees to act as, and assume the
obligations of and limitations and restrictions placed upon, a
Broker-Dealer under Appendix B to the Supplemental Indenture.
SECTION 2.02. PREPARATION FOR EACH AUCTION.
(a) Not later than 10:30 a.m. on each Auction Date for the
ARS, the Auction Agent shall advise BD by telephone of the All-Hold
Rate and the Maximum Rate.
(b) In the event that the Auction Date for any Auction shall
be changed after the Auction Agent has given the notice referred to in
clause (vi) 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 BD not later than the earliest of (i) 9:15
a.m. on the new Auction Date, (ii) 9:15 a.m. on the old Auction Date
and (iii) 9:15 a.m. on the next Interest Payment Date. Thereafter, BD
shall promptly notify customers of BD that BD believes are Existing
Holders of such change in the Auction Date.
(c) The Auction Agent from time to time may request BD to
provide it with the aggregate principal amounts of ARS specifically
held by each such BD as an Existing Holder and with a list of BD's
respective customers that BD believes are beneficial owners of ARS and
the aggregate principal amount of ARS beneficially owned by each such
customer. BD 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 Holders and Potential Holders
in any Auction, and shall not disclose any such information so provided
to any person other than the Trustee, NELNET-1 and BD, 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 previously
received adequate indemnification satisfactory to it.
SECTION 2.03. AUCTION SCHEDULE: METHOD OF SUBMISSION OF ORDERS.
(a) The Auction Agent shall conduct Auctions for the ARS in
accordance with the schedule set forth below. Such schedule may be
changed at any time by the
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Auction Agent with the consent of the Trustee, which consent shall not
be unreasonably withheld or delayed. The Auction Agent shall give
notice of any such change to BD. Such notice shall be received prior to
the close of business on the Business Day next preceding the first
Auction Date on which any such change shall be effective.
TIME EVENT
By 9:00 a.m. Auction Agent obtains One-Month LIBOR
By 10:30 a.m. Auction Agent advises the Broker-Dealers of
the applicable All-Hold Rate and the
applicable Maximum Rate, as set forth in
Section 2.3(b)(i) of the Auction Agency
Agreement.
9:30 a.m. - 12:30 p.m. Auction Agent assembles information
communicated to it by Broker-Dealers as
provided in Section 2.02 of Appendix B to
the Supplemental Indenture. Submission
Deadline is 12:30 p.m.
Not earlier than 12:30 p.m. Auction Agent makes determinations pursuant
to Section 2.02 of Appendix B to the
Supplemental Indenture. Submitted Bids and
Submitted Sell Orders are accepted and
rejected in whole or in part and ARS are
allocated as provided in Section 2.02 of
Appendix B to the Supplemental Indenture.
By approximately 3:00 p.m. Auction Agent advises the Trustee of results
but no later than the of Auction and of the Auction Rate for the
close of business next Interest Period as provided in Appendix
B to the Supplemental Indenture. Auction
Agent gives notice of Auction results as set
forth in Section 2.04(a) hereof.
(b) BD shall submit Orders to the Auction Agent in writing in
substantially the form attached hereto as Exhibit B. BD shall submit
separate Orders to the Auction Agent for each Potential Holder or
Existing Holder on whose behalf BD is submitting an Order and shall not
net or aggregate the Orders of Potential Holders or Existing Holders on
whose behalf BD is submitting Orders.
(c) BD shall deliver to the Auction Agent (i) a written
notice, substantially in the form attached hereto as Exhibit C, of
transfers of ARS, made through BD by an Existing Holder to another
person other than pursuant to an Auction and (ii) a written notice,
substantially in the form attached hereto as Exhibit D, of the failure
of any ARS to be transferred to or by any person that purchased or sold
ARS through BD 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
applicable Auction Date.
(d) BD agrees to handle its customers' Orders in accordance
with its duties under applicable securities laws and rules.
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SECTION 2.04. NOTICES.
(a) On each Auction Date, the Auction Agent shall notify BD by
telephone of the results of the Auction as set forth in paragraph (a)
of the Settlement Procedures. If requested by BD, the Auction Agent
shall as soon as practicable on the Business Day next succeeding such
Auction Date, notify BD in writing, if previously so requested, of the
disposition of all Orders submitted by BD in the Auction held on such
Auction Date.
(b) BD shall notify each Existing Holder or Potential Holder
on whose behalf BD has submitted an Order as set forth in paragraph (b)
of the Settlement Procedures and take such other action as is required
of BD pursuant to the Settlement Procedures.
(c) The Auction Agent shall deliver to BD after receipt all
notices and certificates which the Auction Agent is required to deliver
to BD pursuant to Section 2 of the Auction Agency Agreement at the
times and in the manner set forth in the Auction Agency Agreement.
SECTION 2.05. SERVICE CHARGE TO BE PAID TO BD. On each Interest Payment
Date, for the term of this Agreement, the Auction Agent shall pay to BD,
pursuant to Section 3.5(b) of the Auction Agency Agreement, a service charge for
the succeeding Interest Period in an amount equal to the sum of the product of
(a) a fraction, the numerator of which is the number of days in each Auction
Period occurring during such Interest Period (or, in the case of the initial
Interest Period, the actual number of days elapsed since the date of delivery of
the ARS) and the denominator of which is 360, times (b) the Broker-Dealer Fee
Rate times (c) the sum of (i) the sum of the aggregate principal amount of the
ARS that were (A) the subject of Submitted Bids of Existing Holders submitted by
BD and continued to be held as a result of such submission and (B) the subject
of Submitted Bids of Potential Holders submitted by BD and purchased as a result
of such submission and (ii) the aggregate principal amount of the ARS subject to
valid Hold Orders (determined in accordance with Appendix B to the Supplemental
Indenture) submitted to the Auction Agent by BD and (iii) the principal amount
of the ARS deemed to be subject to Hold Orders by Existing Holders pursuant to
Appendix B to the Supplemental Indenture that were acquired by such Existing
Holders through BD in the Auction for such Auction Period. For purposes of
subclause (c)(iii) of the foregoing sentence, if any Existing Holder who
acquired ARS through BD transfers those ARS to another Person other than
pursuant to an Auction, then the Broker-Dealer for the ARS so transferred shall
continue to be BD; provided, however, that if the transfer was effected by, or
if the transferee is, a Broker-Dealer other than BD, then such Broker-Dealer
shall be the Broker-Dealer for such ARS. 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. The Broker-Dealer Fee Rate shall be .25 of 1% per
annum. The Broker-Dealer Fee shall be payable solely out of amounts received by
the Auction Agent pursuant to the Indenture.
The Broker-Dealer Fee Rate shall be the prevailing rate received by
broker-dealers for rendering comparable services to others. The Auction Agent
shall advise NELNET-1, at NELNET-1's request, at least annually of its view of
such then current prevailing rate. If the then current Broker-Dealer Fee Rate is
not, in the opinion of NELNET-1 and the Auction Agent, the prevailing rate,
NELNET-1 shall change the Broker-Dealer Fee Rate pursuant to the terms
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hereof and shall notify the Auction Agent and the Broker-Dealer in writing
thereof. Any change in the Broker-Dealer Fee Rate shall be effective on the
Auction Date next succeeding such change.
SECTION 2.06. SETTLEMENT.
(a) If any Existing Holder on whose behalf BD has submitted a
Bid or Sell Order for ARS that was accepted in whole or in part fails
to instruct its Participant to deliver the ARS subject to such Bid or
Sell Order against payment therefor, BD shall instruct such Participant
to deliver such ARS against payment therefor and BD may deliver to the
Potential Holder on whose behalf BD submitted a Bid that was accepted
in whole or in part a principal amount of the ARS that is less than the
principal amount of the ARS specified in such Bid to be purchased by
such Potential Holder. Notwithstanding the foregoing terms of this
Section 2.06(a), any delivery or non-delivery of ARS which 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(c) hereof. The Auction Agent shall have
no duty or liability with respect to monitoring or enforcing
requirements of this Section 2.06(a).
(b) Neither the Auction Agent, the Trustee nor NELNET-1 shall
have any responsibility or liability with respect to the failure of an
Existing Holder, a Potential Holder or a Participant or any of them to
deliver ARS or to pay for ARS sold or purchased pursuant to the Auction
Procedures or otherwise.
ARTICLE III
THE AUCTION AGENT
SECTION 3.01. DUTIES AND RESPONSIBILITIES.
(a) The Auction Agent is acting solely as agent for the
Trustee hereunder and owes no fiduciary duties to any Person by reason
of this Agreement.
(b) Notwithstanding Section 3.01(a) above, the Auction Agent
undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement, the Auction Agency Agreement
and Appendix B to the Supplemental Indenture, and no implied duties,
covenants or obligations shall be read into this Agreement against the
Auction Agent by reason of anything set forth in the Prospectus
Supplement or any other offering material employed in connection with
the offer and sale of the ARS, 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 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 necessary to make such judgment.
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SECTION 3.02. RIGHTS OF THE AUCTION AGENT.
(a) The Auction Agent may conclusively rely and shall be fully
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 which the Auction Agent
believes in good faith to have been given by the Trustee or by a
Broker-Dealer or by their designated agents or representatives. The
Auction Agent may record telephone communications with such Persons.
(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 misconduct or negligence on the
part of, or for the supervision of, any agent or attorney appointed by
it with due care hereunder.
(e) The Auction Agent makes no representation as to the
adequacy or accuracy of this Broker-Dealer Agreement, the Auction
Agency Agreement (except as provided in Section 3.1(d) thereof), the
ARS, or any Private Placement Memorandum or other offering material
used in connection with the offer and sale of the ARS.
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. TERMINATION. Any party may terminate this Agreement at
any time upon five days prior notice to the other party. This Agreement shall
automatically terminate upon the delivery of certificates representing the ARS
pursuant to Section 2.02(c) of Appendix B to the Supplemental Indenture, the
occurrence of a Payment Default or upon termination of the Auction Agency
Agreement.
SECTION 4.02. PARTICIPANT IN DEPOSITORY. Either (a) BD is, and shall
remain for the term of this Agreement, a member of, or Participant in, the
Depository, or (b) BD may designate a Participant to act on BD's behalf for
purposes of this Agreement. If BD wishes to designate a different Participant to
act on its behalf, BD shall give the Auction Agent at least two Business Days
prior notice thereof.
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SECTION 4.03. COMMUNICATIONS. Except for (a) communications authorized
to be made by telephone pursuant to this 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 BD, addressed: Banc of America Securities LLC
NC1-005-12-03
000 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Short Term Underwriting and
Trading
Telephone: 000-000-0000
Telecopy: 000-000-0000
If to the Auction Agent, addressed: Deutsche Bank Trust Company Americas
000 Xxxxx Xxx, 0xx Xxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Corporate Trust & Agency
Services
Telephone: 000-000-0000
Telecopy: 000-000-0000
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 BD by a BD Officer and on behalf of
the Auction Agent by an Authorized Officer. BD may record telephone
communications with the Auction Agent.
SECTION 4.04. ENTIRE AGREEMENT. This Agreement contains the entire
agreement between the parties relating to the subject matter hereof, and there
are no other representations, endorsements, promises, agreements or
understandings, oral, written or inferred, between the parties relating to the
subject matter hereof.
SECTION 4.05. BENEFITS. Nothing in this Agreement, express or implied,
shall give to any person, other than the Trustee, the Auction Agent and BD and
their respective successors and assigns, any benefit of any legal or equitable
right, remedy or claim under this Agreement.
SECTION 4.06. AMENDMENT: WAIVER.
(a) This Agreement shall not be deemed or construed to be
modified, amended, rescinded, cancelled or waived, in whole or in part,
except by a written instrument signed by a duly authorized
representative of the party to be charged.
(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.
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(c) The Auction Agent may, but shall have no obligation to,
execute and deliver any amendment or modification hereto which affects
the Auction Agent's rights, powers or immunities hereunder.
SECTION 4.07. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon, inure to the benefit of, and be enforceable by, the respective successors
and permitted assigns of each of BD 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 without the
consent of BD.
SECTION 4.08. 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.
SECTION 4.09. 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 4.10. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
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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 as of the date first above written.
DEUTSCHE BANK TRUST COMPANY
AMERICAS, as Auction Agent
By /s/ Xxxxx Xxxxx
_________________________________________
Name Xxxxx Xxxxx
_______________________________________
Title Vice President
______________________________________
BANC OF AMERICA SECURITIES LLC, as
Broker-Dealer
By /s/ Xxxxxxxxxxx X. Xxxxx
_________________________________________
Xxxxxxxxxxx X. Xxxxx, Principal
NELNET STUDENT LOAN CORPORATION-1,
as Issuer
By /s/ Xxxxx X. Xxxxxx
_________________________________________
Xxxxx X. Xxxxxx, Vice President
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EXHIBIT A
SETTLEMENT PROCEDURES
Capitalized terms used herein shall have the respective meanings
specified in the Indenture and the Broker-Dealer Agreement.
(a) Not later than 3:00 p.m. on each Auction Date, the Auction
Agent is required to notify by telephone the Broker-Dealers that
participated in the Auction held on such Auction Date and submitted an
Order on behalf of any 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 a Bid or a Sell Order 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 ARS, if any, to be 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 ARS, if any, to be
purchased by such Potential Holder;
(v) if the aggregate principal amount of ARS to be
sold by all Existing Holders on whose behalf such
Broker-Dealer submitted Bids or Sell Orders is different than
the aggregate principal amount of ARS to be purchased by all
Potential Holders on whose behalf such Broker-Dealer submitted
a Bid, the name or names of one or more other Buyer's
Broker-Dealers (and the Participant, if any, of each such
other Buyer's Broker-Dealer) acting for one or more purchasers
of such excess principal amount of ARS and the principal
amount of ARS to be purchased from one or more Existing
Holders on whose behalf such Broker-Dealer acted by one or
more Potential Holders on whose behalf each of such other
Buyer's Broker-Dealers acted; and
(vi) if the principal amount of ARS to be purchased
by all Potential Holders on whose behalf such Broker-Dealer
submitted a Bid exceeds the amount of ARS to be sold by all
Existing Holders on whose behalf such 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 agent member, if
any, of each such Seller's Broker-Dealer) acting for one or
more sellers of such excess principal amount of ARS and the
principal amount of ARS to be sold to one or more Potential
Holders on whose behalf such Broker-Dealer acted by one or
more Existing Holders on whose behalf each of such Seller's
Broker-Dealers acted;
(vii) unless previously provided, a list of all
Applicable ARS Rates and related Interest Periods (or portions
thereof) since the last Interest Payment Date; and
(viii) 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 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 Auction Date whether such Bid or
Sell Order was accepted or rejected, in whole or in part;
(ii) instruct each Potential Holder on whose behalf
such Broker-Dealer submitted a Bid that was accepted, in whole
or in part, to instruct such Bidder's Participant to pay to
such Broker-Dealer (or its Participant) through DTC the amount
necessary to purchase the principal amount of ARS to be
purchased pursuant to such Bid against receipt of such
principal amount of ARS;
(iii) in the case of a Broker-Dealer that is a
Seller's Broker-Dealer, instruct each Existing Holder on whose
behalf such 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 Broker-Dealer (or its
Participant) through DTC the principal amount of ARS to be
sold pursuant to such Bid or Sell 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 Auction
Rate for the next Interest Period;
(v) advise each Existing Holder on whose behalf such
Broker-Dealer submitted an Order of the next Auction 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 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
pursuant to paragraph (b)(ii) above, and any ARS received by it
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 Broker-Dealers identified to it by
the Auction Agent following such Auction pursuant to paragraph (a)(v)
or (a)(vi) above.
A-2
(d) On each Auction Date:
(i) each Potential Holder and Existing Holder 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 in DTC shall instruct its Participant to (A) pay
through DTC to the Participant of the Existing Holder
delivering ARS to such Broker-Dealer following such Auction
pursuant to (b)(iii) above the amount necessary, including
accrued interest, if any, to purchase such ARS against receipt
of such ARS, and (B) deliver such ARS through DTC 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 in DTC shall instruct its Participant to (A) pay
through DTC to a Seller's Broker-Dealer (or its Participant)
identified following such Auction pursuant to (a)(vi) above
the amount necessary, including accrued interest, if any, to
purchase the ARS to be purchased pursuant to (b)(ii) above
against receipt of such ARS, and (B) deliver such ARS through
DTC to the Participant of the purchaser thereof against
payment therefor.
(e) On the first Business Day of the Interest Period next
succeeding each Auction Date:
(i) each Participant for a Bidder in the Auction on
such Auction Date referred to in (d)(i) above shall instruct
DTC to execute the transactions described under (b)(ii) or
(b)(iii) above for such Auction, and DTC shall execute such
transactions;
(ii) each Seller's Broker-Dealer or its Participant
shall instruct DTC to execute the transactions described in
(d)(ii) above for such Auction, and DTC shall execute such
transactions; and
(iii) each Buyer's Broker-Dealer or its Participant
shall instruct DTC to execute the transactions described in
(d)(iii) above for such Auction, and DTC shall execute such
transactions.
(f) If an Existing Holder selling ARS in an Auction fails to
deliver such ARS (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 ARS that is less than the
principal amount of ARS that otherwise was to be purchased by such
Potential Holder. In such event, the principal amount of ARS to be so
delivered shall be determined solely by such Broker-Dealer. Delivery of
such lesser principal amount of ARS shall constitute good delivery.
Notwithstanding the foregoing terms of this paragraph (f), any delivery
or nondelivery of ARS which shall represent any departure from the
results of an Auction, as determined by the Auction Agent, shall be of
no effect unless and until the Auction Agent shall have been notified
of such delivery or
A-3
nondelivery in accordance with the provisions of the Auction Agent and
the Broker-Dealer Agreement.
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EXHIBIT B-1
ORDER FORM
(Submit only one Order on this Order Form)
NELNET Student Loan Corporation-1
Taxable Student Loan Asset-Backed Notes
$75,500,000 Senior Class 1996A-6 Auction Rate Securities
Auction Rate Securities
Maturing July 1, 2014
("ARS")
EXHIBIT B-2
TRANSFER FORM
(To be used only for transfers made other than
pursuant to an Auction)
NELNET Student Loan Corporation-1
Taxable Student Loan Asset-Backed Notes
$75,500,000 Senior Class 1996A-6 Auction Rate Securities
Auction Rate Securities
Maturing July 1, 2014
("ARS")
We are (check one):
_____ the Existing Holder named below; or
_____ the Broker-Dealer for such Existing Holder; or
_____ the Participant for such Existing Holder.
We hereby notify you that such Existing Holder has transferred
$_________* ARS to __________________.
[NAME OF EXISTING HOLDER]
[NAME OF BROKER-DEALER]
[NAME OF PARTICIPANT]
By__________________________
Name________________________
Title_______________________
-------------------
*ARS may only be transferred in units of $100,000.
EXHIBIT C
NOTICE OF A FAILURE TO DELIVER
(To be used only for failures to deliver
ARS sold pursuant to an Auction)
NELNET Student Loan Corporation-1
Taxable Student Loan Asset-Backed Notes
$75,500,000 Senior Class 1996A-6 Auction Rate Securities
Auction Rate Securities
Maturing July 1, 2014
("ARS")
COMPLETE EITHER 1 OR 2
1. We are a Broker-Dealer for ______________ (the "Purchaser"),
which purchased $____________________* of the ARS in the Auction held on
____________ from the seller of such ARS.
2. We are a Broker-Dealer for _______________ (the "Seller"),
which sold $_____________* of the ARS in the Auction held on _______________ to
the purchaser of such ARS.
We hereby notify you that (check one) --
_____ the Seller failed to deliver such ARS to the Purchaser
_____ the Purchaser failed to make payment to the Seller upon delivery of
such ARS
[NAME OF BROKER-DEALER]
By_______________________
Name_____________________
Title____________________
------------------
*ARS may only be transferred in units of $100,000.
