EXHIBIT 10.114
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BROKER-DEALER AGREEMENT
among
X.X. XXXXXX SECURITIES INC.
and
UFS SECURITIES, L.L.C.,
as Co-Broker-Dealers
and
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Auction Agent
Relating to:
$100,000,000
MELMAC LLC
Senior Student Loan Revenue Bonds
Series 1996A-1 and -1996A-2
("Auction Rate Securities(SM)")
Dated as of October 15, 2002
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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.... 3
Section 2.02. Preparation for Each Auction........................................................... 3
Section 2.03. Auction Schedule: Method of Submission of Orders....................................... 4
Section 2.04. Notices................................................................................ 5
Section 2.05. Service Charge To Be Paid to the Broker-Dealer......................................... 5
Section 2.06. Settlement............................................................................. 6
ARTICLE III
THE AUCTION AGENT
Section 3.01. Duties and Responsibilities............................................................ 7
Section 3.02. Rights of the Auction Agent............................................................ 7
Section 3.03. The Auction Agent's Disclaimer......................................................... 8
ARTICLE IV
MISCELLANEOUS
Section 4.01. Termination............................................................................ 8
Section 4.02. Agent Member........................................................................... 8
Section 4.03. Communications......................................................................... 8
Section 4.04. Entire Agreement....................................................................... 9
Section 4.05. Benefits............................................................................... 9
Section 4.06. Amendment; Waiver...................................................................... 9
Section 4.07. Successors and Assigns................................................................. 10
Section 4.08. Severability........................................................................... 10
Section 4.09. Execution in Counterparts.............................................................. 10
ARTICLE V
GOVERNING LAW.......................................................................................... 10
EXHIBIT A SETTLEMENT PROCEDURES
EXHIBIT B ORDER FORM
EXHIBIT C NOTICE OF TRANSFER
EXHIBIT D NOTICE OF A FAILURE TO DELIVER OR MAKE PAYMENT
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BROKER-DEALER AGREEMENT
THIS BROKER-DEALER AGREEMENT dated as of October 15, 2002 (this
"Broker-Dealer Agreement"), is by and between DEUTSCHE BANK TRUST COMPANY
AMERICAS (formerly known as Bankers Trust Company and together with its
successor 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 the Maine
Educational Loan Marketing Corporation) (the "Corporation"), X.X. XXXXXX
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 $100,000,000 Senior Student
Loan Revenue Bonds, Series 1996A-1 and 1996A-2 (the "Series 1996A Bonds"), under
an Amended and Restated Indenture of Trust, dated as of January 1, 1999 (the
"Indenture"), 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 the Auction
Rate Securities(sm) for each Interest Period after the Initial Period shall
equal 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 2.10
of the Auction Agent Agreement, dated as of May 1, 1996 (the "Auction Agent
Agreement"), among the Trustee, the Auction Agent and the Corporation, 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:
"Applicable Auction Rates" means the rate per annum at which interest
accrues on a subseries of the Auction Rate Securities during the related
Interest Period.
"Auction Rate" means the Auction Rate as defined in the Indenture.
"Auction Rate Securities" means the Series 1996A Bonds bearing interest
at an Auction Rate.
"Authorized Officer" means, with respect to the Auction Agent, each
Senior Vice President, Vice President, Assistant Vice President, Trust Officer,
Assistant Manager of the Auction Agent and every other officer of the Auction
Agent assigned to its Corporate Trust and Agency Group and every other officer
or employee of the Auction Agent designated as an "Authorized Officer" for
purposes of this Agreement in a 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 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 Broker-Dealer 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.
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ARTICLE II
THE AUCTION
SECTION 2.01. PURPOSE: INCORPORATION BY REFERENCE OF AUCTION PROCEDURES
AND SETTLEMENT PROCEDURES.
(a) On each Rate Determination Date, except for a Rate
Determination Date which is also an Auction Period Conversion Date, the
provisions of the Auction Procedures will be followed by the Auction
Agent for the purpose of determining the Auction Rate for each
subseries of the Auction Rate Securities 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(c) 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 Broker-Dealer Agreement to the
same extent as if such provisions were fully set forth herein.
(c) The Broker-Dealer and other broker-dealers, as
defined in the Indenture, may participate in Auctions for their own
accounts.
SECTION 2.02. PREPARATION FOR EACH AUCTION.
(a) Not later than 9:30 a.m. on each Rate Determination Date
for each subseries of the Auction Rate Securities, the Auction Agent
shall advise the Broker-Dealer by telephone of the All Hold Rate, the
Maximum Rate and the "AA" Composite Commercial Paper Rate or the Index,
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 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 subseries of the Auction Rate Securities held
by the Broker-Dealer as an Existing Holder.
(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.
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SECTION 2.03. AUCTION SCHEDULE: METHOD OF SUBMISSION OF ORDERS.
(a) The Auction Agent shall conduct Auctions for each
subseries of the Auction Rate Securities in accordance with the
schedule set forth below. Such schedule may be changed by the Auction
Agent with the consent of the Trustee and the Market Agent, which
consents shall not be unreasonably withheld or delayed. The Auction
Agent shall give written notice of any such change to the
Broker-Dealer. Such notice shall be given prior to the close of
business on the Business Day next preceding the first Rate
Determination Date on which any such change shall be effective.
By 9:00 a.m. The Market Agent provides the Auction
Agent with the Index.
By 9:30 a.m. The Auction Agent advises the Trustee and
the Broker-Dealers of the Maximum Rate,
the All Hold Rate and the "AA" Composite
Commercial Paper Rate or the Index, 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.-1:00 p.m. The Auction Agent assembles information
communicated to it by Broker-Dealers as
provided in Section 2.03(b)(i) of the
Indenture. The Submission Deadline is 1:00
p.m.
Not earlier than 1:00 p.m. The Auction Agent makes determinations
pursuant to Section 2.03(c)(i) of the
Indenture.
By approximately 3:00 p.m. The Auction Agent advises the Trustee of
the results of the Auction as provided in
Section 2.03(c)(ii) of the 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 2.03(d) of the Indenture. The
Auction Agent gives notice of Auction
results as set forth in Section 2.04(a)
hereof.
(b) The Broker-Dealer agrees to maintain a list of Potential
Holders and to contact the Potential Holders of 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
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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.
(e) If the Broker-Dealer is an affiliate of the Corporation,
it 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 requested
by the Broker-Dealer, the Auction Agent shall as soon as practical on
the Business Day next succeeding such Rate Determination Date if
previously requested by the Broker-Dealer notify 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 by the Broker-Dealer pursuant to
the Settlement Procedures. The Broker-Dealer, as the sole, initial
Broker-Dealer (as defined in the Indenture), shall also notify the
Corporation, in writing of the Auction Rate within a reasonable time
(not in excess of two Business Days) after the determination thereof.
(c) The Auction Agent shall deliver to the Broker-Dealer after
receipt 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 Auction Agent shall pay
to the Broker-Dealer from moneys received
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from the Trustee, not later than 12:00 p.m., eastern time, on the next
succeeding Business Day after such Auction, an amount equal to the product of
(i) 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
(ii) the Broker-Dealer Fee Rate; times (iii) the sum of (A) the aggregate
principal amount of Auction Rate Securities placed by the Broker-Dealer in such
Auction that were (1) 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 (2) the subject of Submitted Bids of Potential Holders submitted
by the Broker-Dealer and purchased as a result of such submission; plus (B) the
aggregate principal amount of Auction Rate Securities subject to valid Hold
Orders submitted to the Auction Agent by the Broker-Dealer; plus (C) 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. For purposes of clause (iii)(C)
above, if any Existing Holder who acquired Auction Rate Securities through the
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.
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 Agent Member to
deliver the Auction Rate Securities subject to such Bid or Sell Order
against payment therefor, the Broker-Dealer shall instruct such Agent
Member 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 non-delivery 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) Neither 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
Agent Member 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).
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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.
(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 Official Statement, 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 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.
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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 Agent Agreement or the
Auction Rate Securities or any Official Statement or other offering material
used in connection with the offer and sale of the Auction Rate Securities.
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
2.25(d) of 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. AGENT MEMBER. The Broker-Dealer is, and shall remain for
the term of this Broker-Dealer Agreement, a member of, or Agent Member in, the
Securities Depository (or an affiliate of such a member or Agent Member).
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: 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 the Broker-Dealer: UFS Securities, L.L.C.
000 Xxxxx 00xx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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 & Agency Services
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If to the Trustee: Banknorth, National Association
0000 Xx. Xxxxxx Xxxx
X.X. Xxx 0000
Xxxxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Corporate Trust Department
If to the Corporation: MELMAC LLC
Xxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: MELMAC LLC
c/o Nelnet, Inc.
000 X. 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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 Corporation.
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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 both of the Broker-Dealer and the Auction
Agent.
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
sections 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 said State.
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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 and effective as of October 15, 2002.
DEUTSCHE BANK TRUST COMPANY
AMERICAS, as Auction Agent
By /s/ Xxxxxx X. Xxxxx Xx.
________________________________________
Name Xxxxxx X. Xxxxx Xx.
______________________________________
Title Vice President
_____________________________________
X.X. XXXXXX SECURITIES INC., as Co-
Broker-Dealer
By /s/ Xxxxx X. X'Xxxxxx
________________________________________
Xxxxx X. X'Xxxxxx, Vice President
UFS SECURITIES, L.L.C., as Co-Broker-
Dealer
By /s/ Xxxx X. Xxxxx
________________________________________
Xxxx X. Xxxxx, Vice President
Acknowledged and Agreed to:
MELMAC LLC
By /s/ Xxxxx X. Xxxxxx
________________________________________
Xxxxx X. Xxxxxx, Vice President
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EXHIBIT A
SETTLEMENT PROCEDURES
If not otherwise defined herein, capitalized terms used herein shall
have the meanings given such terms in Article I of the Indenture. These
Settlement Procedures shall apply separately for each subseries of the Auction
Rate Securities.
(a) Not later than 3:00 p.m. 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 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 Agent Member, 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 Agent Member, 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;
(vii) unless previously provided, a list of all
Applicable Auction Rates and related Interest Periods (or
portions thereof) since the last Interest Payment Date; and
(viii) 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 Agent
Member to pay such Buyer's Broker-Dealer (or its Agent Member)
through the Securities Depository the amount necessary to
purchase the principal amount of 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 Agent
Member to deliver to such Seller's Broker-Dealer (or its Agent
Member) through the Securities 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 Auction
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 for such
subseries of the Auction Rate Securities.
(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
A-2
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
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 shall
instruct its Agent Members as provided in paragraph (b)(ii) or
(b)(iii) above, as the case may be;
(ii) each Seller's Broker-Dealer that is not an Agent
Member of the Securities Depository shall instruct its Agent
Member to (A) pay through the Securities Depository to the
Agent Member of the Existing Holder delivering Auction Rate
Securities to such Broker-Dealer following such Auction
pursuant to paragraph (b)(ii) above, the amount necessary,
including accrued interest, if any, to purchase such Auction
Rate Securities against receipt of such Auction Rate
Securities, and (B) deliver such Auction Rate Securities
through the Securities Depository to a Buyer's Broker-Dealer
(or its Agent Member) 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 Agent
Member in the Securities Depository shall instruct its Agent
Member to (A) pay through the Securities Depository to
Seller's Broker-Dealer (or its Agent Member) identified
following such Auction pursuant to paragraph (a)(vi) above the
amount necessary, including accrued interest, if any, to
purchase Auction Rate Securities to be purchased pursuant to
paragraph (b)(iii) above against receipt of such Auction Rate
Securities, and (B) deliver such Auction Rate Securities
through the Securities Depository to the Agent Member of the
purchaser against payment therefor.
(e) On the Business Day following each Rate Determination
Date:
(i) each Agent Member for a Bidder in the Auction on
such Rate Determination Date referred to in paragraph (d)(i)
above shall instruct the Securities Depository to execute the
transactions described under paragraph (b)(ii) or (b)(iii)
above for such Auction, and the Securities Depository shall
execute such transactions;
(ii) each Seller's Broker-Dealer or its Agent Member
shall instruct the Securities Depository to execute the
transactions described in paragraph (d)(ii) above for such
Auction, and the Securities Depository shall execute such
transactions; and
A-3
(iii) each Buyer's Broker-Dealer or its Agent Member
shall instruct the Securities Depository to execute the
transactions described in paragraph (d)(iii) above for such
Auction, and the Securities Depository shall 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 shall be determined solely by such
Broker-Dealer (but only in denominations of $100,000 or any integral
multiples thereof). Delivery of such lesser principal amount of Auction
Rate Securities shall constitute good delivery. Notwithstanding the
foregoing terms of this paragraph (f), any delivery or nondelivery of
Auction Rate Securities 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 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 Agent Member to take
delivery of or deliver, as the case may be, the principal amount of
Auction Rate Securities purchased or sold pursuant to an Auction or
otherwise.
A-4
EXHIBIT B
ORDER FORM
$__________
MELMAC LLC
Senior Student Loan Revenue Bonds
Series 1996A [-1] [-2]
[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 BONDS
EXISTING HOLDER* ($100,000 OR MULTIPLES) 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.
$___________
MELMAC LLC
Senior Student Loan Revenue Bonds
Series 1996A [-1] [-2]
BIDS BY EXISTING HOLDERS
PRINCIPAL AMOUNT OF BONDS
POTENTIAL HOLDER* ($100,000 OR MULTIPLES) BID RATE
1. ____________________ _________________________ ____________________
2. ____________________ _________________________ ____________________
3. ____________________ _________________________ ____________________
4. ____________________ _________________________ ____________________
5. ____________________ _________________________ ____________________
6. ____________________ _________________________ ____________________
7. ____________________ _________________________ ____________________
8. ____________________ _________________________ ____________________
9. ____________________ _________________________ ____________________
10. ____________________ _________________________ ____________________
11. ____________________ _________________________ ____________________
12. ____________________ _________________________ ____________________
13. ____________________ _________________________ ____________________
14. ____________________ _________________________ ____________________
15. ____________________ _________________________ ____________________
Bonds:
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.
--------------
*Potential Holders may be described by name or other reference as
determined in the sole discretion of the Broker-Dealer.
B-2
2. A Hold or Sell Order may be placed only by an Existing Holder
covering a principal account of Auction Rate Securities of such subseries 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 (.001 of 1%).
5. An order must be submitted in principal amounts of $100,000 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
000 Xxxxx Xxx, 0xx Xxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
B-3
EXHIBIT C
NOTICE OF TRANSFER
$____________
MELMAC LLC
Senior Student Loan Revenue Bonds
Series 1996A [-1] [-2]
(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 Holder; or
_____ the Agent Member for such Existing Holder.
We hereby notify you that such Existing Holder has transferred
$__________ (must be in units of $100,000) of Auction Rate Securities of such
subseries to ____________________.
-------------
*Existing Holders may be described by name or other reference as determined in
the sole discretion of the Broker-Dealer.
[EXISTING HOLDER]
By___________________________________________________
Name_________________________________________________
Title________________________________________________
[NAME OF BROKER-DEALER]
By___________________________________________________
Name_________________________________________________
Title________________________________________________
[NAME OF AGENT MEMBER]
By___________________________________________________
Name_________________________________________________
Title________________________________________________
EXHIBIT D
NOTICE OF A FAILURE TO DELIVER OR MAKE PAYMENT
$__________
MELMAC LLC
Senior Student Loan Revenue Bonds
Series 1996A [-1] [-2]
Complete Either I. or II.
I. We are a Broker-Dealer for Holder* ___________
(the "Purchaser"), which purchased $___________ (must be in units of
$100,000) of Auction in the Auction held on ____________________ from
the seller of such Auction Rate Securities.
II. We are a Broker-Dealer for Holder* ___________
(the "Seller"), which sold $___________ (must be in units of $100,000)
of Auction in the Auction held on ____________________ to the purchaser
of such Auction Rate Securities.
We hereby notify you that (check one):
_____ the Seller failed to deliver such Auction Rate
Securities to the Purchaser; or
_____ the Purchaser failed to make payment to the Seller upon
delivery of such Auction Rate Securities.
[NAME OF BROKER-DEALER]
By________________________________________
Name______________________________________
Title_____________________________________
-------------------
*Holders may be described by name or other reference as determined in the sole
discretion of the Broker-Dealer.
