EXHIBIT 10.118
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BROKER-DEALER AGREEMENT
among
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Auction Agent
and
X.X. XXXXXX SECURITIES INC.
and
UFS SECURITIES, L.L.C.,
as Broker-Dealer
Relating to:
$350,000,000
EMT Corp.
Student Loan Asset-Backed Notes
1998 Senior Series A-1
1998 Senior Series A-2
1998 Senior Series A-3
1998 Senior Series A-4
1998 Senior Subordinate Series B
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 Trust Agreement......................................... 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 BD........................................................... 6
Section 2.06. Settlement................................................................................ 7
ARTICLE III
THE AUCTION AGENT
Section 3.01. Duties and Responsibilities............................................................... 8
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 in Securities Depository...................................................... 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.................................................................... 10
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 TRANSFER FORM
EXHIBIT D NOTICE OF A FAILURE TO DELIVER
ii
BROKER-DEALER AGREEMENT
BROKER-DEALER AGREEMENT (the "Agreement") dated as of October 15, 2002
between DEUTSCHE BANK TRUST COMPANY AMERICAS (as successor to IBJ Xxxxxxxx Bank
& Trust Company) (together with its successors and assigns, the "Auction
Agent"), appointed as such pursuant to the provisions of a Trust Agreement dated
as of May 15, 1998 (the "Trust Agreement") as supplemented and amended by the
First Terms Supplement dated as of May 15, 1998 (the "First Terms Supplement"
and together with the Trust Agreement, collectively referred to herein as the
"Trust Agreement") between Zions First National Bank (as successor to NBD Bank,
N.A.) (the "Trustee"), as trustee and EMT Corp. (the "Issuer") pursuant to
authority granted to it in the Auction Agency Agreement between the Trustee and
the Auction Agent hereinafter defined, X.X. XXXXXX SECURITIES INC. and UFS
SECURITIES, L.L.C. (together with their successors and assigns hereinafter
collectively referred to as "BD").
WHEREAS, the Issuer has issued $350,000,000 aggregate principal amount
of Student Loan Asset Backed Notes consisting of $82,000,000 aggregate principal
amount of 1998 Senior Series A-1, $80,000,000 aggregate principal amount of 1998
Senior Series A-2, $80,000,000 aggregate principal amount of 1998 Senior Series
A-3, $80,000,000 aggregate principal amount of 1998 Senior Series A-4 and
$28,000,000 aggregate principal amount of 1998 Senior Subordinate Series B
(hereinafter referred to as the "Auction Rate Securities" or the "ARS"). The ARS
have been issued pursuant to the Trust Agreement; and
WHEREAS, the Trust Agreement provides that the Series Interest Rate on
each Series of the ARS for each Auction Period after the Series Initial Period
shall be, except as otherwise provided in the Trust Agreement, equal to the
lesser of (a) the Net Loan Rate in effect for such Series Interest Period and
(b) the Auction Rate that the Auction Agent advises has resulted on the Auction
Date from the implementation of the Auction Procedures. Pursuant to Section 2.9
of the Auction Agency Agreement, the Auction Agent has entered into this
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 and BD agree as follows:
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
SECTION 1.01. TERMS DEFINED BY REFERENCE TO THE TRUST AGREEMENT.
Capitalized terms not defined herein shall have the respective meanings
specified in or pursuant to the Trust Agreement 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" has the meaning specified in Section 2.01 hereof.
"Auction Agency Agreement" means the Auction Agency Agreement dated as
of May 15, 1998 between the Trustee and the Auction Agent relating to the ARS.
"Auction Procedures" means the Auction Procedures that are set forth in
Article II of the First Terms Supplement.
"Authorized Officer" means, with respect to the Auction Agent, each
Managing Director, Vice President, Assistant Vice President, Trust Officer,
Assistant Secretary and Assistant Treasurer of the Auction Agent 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 communication to BD.
"BD Officer" means each officer or employee of BD designated as a "BD
Officer" for purposes of this Agreement in a communication to the Auction Agent.
"Broker-Dealer Agreement" means this Agreement and any substantially
similar agreement between the Auction Agent and a Broker-Dealer.
"Settlement Procedures" means 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) In case of any conflict between the provisions of
this Agreement and the provisions of the First Terms Supplement, the
First Terms Supplement shall control.
(e) All references herein to a particular time of day
shall be to New York City time.
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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 Series Interest Rate for the next Auction 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) 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 Section 2.5.6 of the First Terms Supplement may 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, provided that BD or such other
Broker-Dealers, as the case may be have executed and deposited with the
Auction Agent a Master Purchaser's Letter. However, the Issuer may, by
notice to BD and all other Broker-Dealers given no later than 3:00 p.m.
on the Business Day next preceding an Auction, prohibit all (but not
less than all) Broker-Dealers from submitting Bids for their own
account in such Auction and, if so specified in such notice, all future
Auctions until such notice is withdrawn, but the Broker-Dealers may
continue to submit Hold and Sell orders for their own accounts and Bids
on behalf of customers. The Auction Agent shall have no duty or
liability with respect to enforcement of this subsection.
(e) BD is delivering herewith, or has previously
delivered, a Master Purchaser's Letter executed by BD and 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 may, in its discretion, collect from each purchaser of
ARS from or through BD a Master Purchaser's Letter, whether or not such
purchaser is recorded on the Existing Note Holder Registry as an
Existing Note Holder, and to otherwise act as, and assume the
obligations of and limitations and restrictions placed upon, a
Broker-Dealer under the Trust Agreement.
SECTION 2.02. PREPARATION FOR EACH AUCTION.
(a) Not later than 9:30 a.m. on each Auction Date for a
Series of the ARS, the Auction Agent shall advise BD by telephone of
the Applicable LIBOR Rate and the United States Treasury Security Rate
and not later than 9:30 a.m. on each Auction Date
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for the ARS, the Auction Agent shall advise BD of the Net Loan Rate,
the All Hold Rate and the Maximum Auction 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 earlier of
9:15 a.m. on the new Auction Date and 9:15 a.m. on the old Auction
Date. Thereafter, BD shall promptly notify customers of BD that BD
believes are Existing Note Holders of such change in the Auction Date.
(c) The Auction Agent from time to time may request that
BD provide it with a list of the respective customers BD believes are
Existing Note Holders of a Series of the ARS and the aggregate
principal amounts of ARS of such Series specifically 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 Bidders in any Auction, and shall not
disclose any such information so provided to any person other than the
Trustee, the Issuer and BD; provided that the Auction Agent reserves
the right to disclose any such information if it is advised by its
counsel that such failure would be unlawful.
(d) The Auction Agent is not required to accept the
Master Purchaser's Letter of any Potential Note Holder who wishes to
submit a Bid for the first time in any Auction or of any Potential Note
Holder or Existing Note Holder who wishes to amend its Master
Purchaser's Letter unless it is received by the Auction Agent by 3:00
p.m. on the Business Day preceding such Auction. BD shall promptly
deliver to the Auction Agent two copies of any Master Purchaser's
Letter or any amended Master Purchaser's Letter received from any
Potential Note Holder or Existing Note Holder.
SECTION 2.03. AUCTION SCHEDULE: METHOD OF SUBMISSION OF ORDERS.
(a) The Auction Agent shall conduct Auctions for each
Series of the ARS in accordance with the schedule set forth below. Such
schedule may be changed at any time by the Auction Agent with consent
of the Trustee, at the direction of the Issuer, which consent shall not
be unreasonably withheld or delayed. The Auction Agent shall give
written 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. Market Agent provides Auction Agent with the
Applicable LIBOR Rate and the United States
Treasury Security Rate.
By 9:30 a.m. Auction Agent notifies the Trustee and the
Broker-Dealers of the Net Loan Rate, the All Hold
Rate and the Maximum Auction Rate and the
Applicable LIBOR Rate and the United States
Treasury Security Rate used in determining such
rates, as set forth in
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Section 2.02(a) hereof.
9:30 a.m.-12:30 p.m. Auction Agent assembles information communicated
to it by Broker-Dealers as provided in Article II
of the First Terms Supplement. Submission Deadline
is 12:30 p.m.
Not earlier than 12:30 p.m. Auction Agent makes determinations pursuant to
Article II of the First Terms Supplement.
Submitted Bids and Submitted Sell Orders are
accepted and rejected in whole or in part and
principal amounts of ARS are allocated as provided
in Article II of the First Terms Supplement.
Not later than 3:00 p.m. Auction Agent advises the Trustee of the Series
Interest Rate for the next Auction Period and of
results of the Auction as provided in Article II
of the First Terms Supplement. Auction Agent gives
notice of Auction results as set forth in Section
2.04(a) hereof.
(b) BD agrees to maintain a list of Potential Note
Holders and to contact the Potential Note Holders on such list on or
prior to each Auction Date for the purpose of participating in the
Auction on such Auction Date.
(c) BD shall submit Orders to the Auction Agent in
writing in substantially the form attached hereto as Exhibit B. BD
shall submit a separate Order to the Auction Agent for each Potential
Note Holder or Existing Note Holder on whose behalf BD is submitting an
Order and shall not net or aggregate the Orders of Potential Note
Holders or Existing Note Holders on whose behalf BD is submitting
Orders.
(d) 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 Note Holder to another
person other than pursuant to an Auction and shall deliver or cause to
be delivered the related Master Purchaser's Letter executed by such
person if such person has not previously so delivered a Master
Purchaser's Letter; and (ii) a written notice, in substantially 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 give
effect to any notice 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.
(e) BD agrees to handle its customers' Orders in
accordance with its duties under applicable securities laws and rules.
(f) BD agrees not to sell, assign or dispose of any ARS
to any person who has not delivered a signed Master Purchaser's Letter
to the Auction Agent.
(g) Prior to or concurrently with the execution and
delivery of the Auction Agent Agreement, BD shall provide the Auction
Agent with a list of the Existing Note Holders of the ARS who have
agreed to purchase such ARS through BD, if any. In order to verify the
accuracy and authenticity of the lists of Existing Note Holders so
provided,
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the Auction Agent may confirm those lists of the Existing Note Holders
to the respective Broker-Dealers who provided the original lists within
10 Business Days of the Auction Agent's receipt thereof.
(h) BD has delivered to the Auction Agent or is
delivering herewith its executed Master Purchaser's Letter. BD and
other Broker-Dealers which have delivered duly executed Master
Purchaser's Letters may submit Orders in Auctions for their own
accounts; provided, however, that any Broker-Dealer that is an
affiliate of the Issuer must submit at the next Auction therefor a Sell
Order covering all ARS 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(h).
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. By approximately 10:30 a.m. on the
Business Day next succeeding such Auction Date, the Auction Agent shall
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 Note Holder or
Potential Note 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.
(a) On the first Business Day in the month of December
2002 and, thereafter, on the first Business Day of each month during
the term of this Agreement, the Auction Agent shall pay to BD from
moneys received from the Trustee pursuant to Section 3.5(b) of the
Auction Agency Agreement an amount for each Series of ARS equal to the
product of (i) a fraction, the numerator of which is the number of days
in the preceding month and the denominator of which is 360 days; times
(ii) the Broker-Dealer Fee Rate; times (iii) the sum, on the Auction
Date for such Series of ARS during such preceding month of (A) the
aggregate principal amount of the ARS placed by BD in such Auction that
were (1) the subject of Submitted Bids of Existing Note Holders
submitted by BD and continued to be held as a result of such
submission, and (2) the subject of Submitted Bids of Potential Note
Holders submitted by BD and purchased as a result of such submission;
(B) the aggregate principal amount of the ARS subject to valid Hold
Orders (determined in accordance with the First Terms Supplement)
submitted to the Auction Agent by BD; and (C) the principal amount of
the ARS deemed to be subject to Hold Orders by Existing Note Holders
pursuant to the First Terms Supplement that were acquired by
6
such Existing Note Holders through BD; provided, however, with respect
to Notes with an Auction Period of more than 35 days, the
Broker-Dealers shall be entitled to payment on the first Business Day
of the month immediately succeeding each Auction Date for such Series
and the numerator referred to in Section 2.05(a)(i) shall be the number
of days in such Auction Period or the Series Initial Period, as
applicable. For purposes of clause (iii)(C) of the foregoing sentence,
if any Existing Note 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
shall be payable solely out of amounts received by the Auction Agent
pursuant to the First Terms Supplement.
(b) 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 the Trustee and the Issuer, at
their request, at least annually of such then current prevailing rate.
If the then current Broker-Dealer Fee Rate is not equal to the
prevailing rate, the Trustee, at the direction of the Issuer, shall
change the Broker-Dealer Fee Rate pursuant to the terms of the Auction
Agency Agreement and shall notify the Auction Agent and BD 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 Note 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 Note 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 Note 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(d) hereof.
The Auction Agent shall have no duty or liability with respect to
monitoring or enforcing requirements of this Section 2.06(a).
(b) None of the Auction Agent, the Trustee or the Issuer
shall have any responsibility or liability with respect to the failure
of an Existing Note Holder, a Potential Note 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. The Auction Agent shall have no
responsibility for any adjustment to fees paid pursuant to Section 2.05
hereof as a result of any failure described in this Section 2.06(b).
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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 has no duties to any other person 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 the pertinent
facts.
SECTION 3.02. RIGHTS OF THE AUCTION AGENT.
(a) The Auction Agent may conclusively 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 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 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 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 correctness of the recitals in, or the validity or
adequacy of, this Broker-Dealer Agreement, the Auction Agency Agreement or the
Bonds.
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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 Article II of the Trust Agreement or upon termination of the Auction
Agency Agreement.
SECTION 4.02. PARTICIPANT IN SECURITIES DEPOSITORY. Either (a) BD is,
and shall remain for the term of this Agreement, a member of, or Participant in,
the Securities 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.
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: X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. X'Xxxxxx
If to BD: UFS Securities, L.L.C.
0000 Xxxxx 00xx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxx
If to the Auction Agent: Deutsche Bank Trust Company Americas
000 Xxxxx Xxx, 0xx Xxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Corporate Trust and Agency
Services
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If to the Issuer: EMT Corp.
c/o Nelnet, Inc.
000 Xxxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Treasurer
with a copy to: EMT Corp.
0000 Xxxxxxxxx Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (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 each party hereto. The provisions herein regarding
auction procedures may be amended from time to time to conform to
industry or market practices solely upon the written consent of the
parties hereto and upon written notice of such amendment to the
affected Holders of such ARS and no prior written consent of any such
Holder shall be required in connection with such amendment.
(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.
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
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assigned by the Auction Agent to a successor Auction Agent selected by the
Trustee at the direction of the Issuer 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.
ARTICLE V
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 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 VP
__________________________________
X.X. XXXXXX SECURITIES INC.
By /s/ Xxxxx X. X'Xxxxxx
_____________________________________
Xxxxx X. X'Xxxxxx, Vice President
UFS SECURITIES, L.L.C.
By /s/ Xxxx X. Xxxxx
_____________________________________
Xxxx X. Xxxxx, Vice President
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EXHIBIT A
SETTLEMENT PROCEDURES
Capitalized terms used herein shall have the respective meanings
specified in the First Terms Supplement to the Trust Agreement.
(a) 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 Note Holder or Potential Note Holder of:
(i) the Series Interest Rate fixed for the next
succeeding Auction Period;
(ii) whether Sufficient Clearing Bids existed for
the determination of the Auction Rate;
(iii) if such Broker-Dealer submitted a Bid or a
Sell Order on behalf of an Existing Note 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 Note Holder;
(iv) if such Broker-Dealer submitted a Bid on
behalf of a Potential Note 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 Note
Holder;
(v) if the aggregate principal amount of ARS to
be sold by all Existing Note Holders on whose behalf such
Broker-Dealer submitted Bids or Sell Orders is different from
the aggregate principal amount of ARS to be purchased by all
Potential Note Holders on whose behalf such Broker-Dealer
submitted a bid, the name or names of one or more other
Broker-Dealers (and the Agent Member, if any, of each such
other Broker-Dealer) and the principal amount of ARS to be (A)
purchased from one or more Existing Note Holders on whose
behalf such other Broker-Dealers submitted Bids or Sell
Orders, or (B) sold to one or more Potential Note Holders on
whose behalf such other Broker-Dealers submitted Bids; and
(vi) the scheduled Auction Date of the next
succeeding Auction.
(b) On each Auction Date, each Broker-Dealer that
submitted an Order on behalf of any Existing Note Holder or Potential
Note Holder is required to:
(i) advise each Existing Note Holder and
Potential Note Holder on whose behalf such Broker-Dealer
submitted a Bid or Sell Order whether such Bid or Sell Order
was accepted or rejected, in whole or in part;
(ii) instruct each Existing Note Holder on whose
behalf such Broker-Dealer submitted a Bid that was accepted,
in whole or in part, to instruct such Bidder's Agent Member,
to pay to such Broker-Dealer (or its Agent Member) through the
Securities Depository the amount necessary, including accrued
interest, if any, to purchase the principal amount of ARS to
be purchased pursuant to such Bid against receipt of such
principal amount of ARS;
(iii) instruct each Existing Note Holder on whose
behalf such Broker-Dealer submitted a Bid that was accepted,
in whole or in part, or a Sell Order that was accepted, in
whole or in part, to instruct such Bidder's Agent Member to
deliver to such Broker-Dealer (or its Agent Member) through
the Securities Depository the principal amount of ARS to be
sold pursuant to such Bid or Sell Order against payment
therefor;
(iv) advise each Existing Note Holder on whose
behalf such Broker-Dealer submitted an Order and each
Potential Note Holder on whose behalf such Broker-Dealer
submitted a Bid of the Series Interest Rate for the next
succeeding Auction Period;
(v) advise each Existing Note Holder on whose
behalf such Broker-Dealer submitted an Order of the scheduled
Auction Date of the next succeeding Auction; and
(vi) advise each Potential Note Holder on whose
behalf such Broker-Dealer submitted a Bid that was accepted,
in whole or in part, of the Auction Date of the next
succeeding Auction.
(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 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 Note Holders,
if any, on whose behalf such Broker-Dealer submitted Bids, the Existing
Note Holders, if any, on whose behalf such Broker-Dealer submitted Bids
or Sell Orders, and any Broker-Dealers identified to it by the Auction
Agent pursuant to paragraph (a)(v) above.
(d) On the Business Day immediately succeeding the
Auction Date, the Securities Depository will execute the transactions
described above, debiting and crediting the accounts of the respective
Agent Members as necessary to effect the purchases and sales of ARS as
determined in the Auction.
A-2
EXHIBIT B
ORDER FORM
(Submit only one Order on this Order Form)
$350,000,000
EMT CORP.
Student Loan Asset-Backed Notes
1998 Senior Series A-1
1998 Senior Series A-2
1998 Senior Series A-3
1998 Senior Series A-4
1998 Senior Subordinate Series B
Auction Rate Securities
("ARS")
$__________ 1998 __________ Series __________
EXHIBIT C
TRANSFER FORM
(To be used only for transfers made other than pursuant to an Auction)
$350,000,000
EMT CORP.
Student Loan Asset-Backed Notes
1998 Senior Series A-1
1998 Senior Series A-2
1998 Senior Series A-3
1998 Senior Series A-4
1998 Senior Subordinate Series B
Auction Rate Securities
("ARS")
We are (check one):
_____ the Existing Note Holder named below;
_____ the Broker-Dealer for such Existing Note Holder; or
_____ the Participant for such Existing Note Holder.
We hereby notify you that such Existing Note Holder has transferred
$_________ *ARS to _________________.
[NAME OF EXISTING NOTE HOLDER]
By __________________________________
Name ________________________________
Title _______________________________
[NAME OF BROKER-DEALER]
By __________________________________
Name ________________________________
Title _______________________________
--------------
* ARS may only be transferred in units of $50,000.
[NAME OF PARTICIPANT]
By __________________________________
Name ________________________________
Title _______________________________
C-2
EXHIBIT D
NOTICE OF A FAILURE TO DELIVER
(To be used only for failure to deliver ARS sold pursuant to an Auction)
$350,000,000
EMT Corp.
Student Loan Asset-Backed Notes
1998 Senior Series A-1
1998 Senior Series A-2
1998 Senior Series A-3
1998 Senior Series A-4
1998 Senior Subordinate Series B
Auction Rate Securities
("ARS")
Complete either I. or II.
I. We are a Broker-Dealer for ____________________ (the
"Purchaser"), which purchased $__________* of the ARS in the
Auction held on __________ from the seller of such ARS.
II. 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; or
_____ 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 $50,000.
