Exhibit K.3
NUVEEN AUCTION AGENCY AGREEMENT
Basic Terms for Acting as Auction Agent
Relating to
TAXABLE AUCTIONED PREFERRED SHARES
January 11, 2002
TABLE OF CONTENTS
PAGE
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1. DEFINITIONS AND RULES OF CONSTRUCTION................................. 1
1.1 Terms Defined by Reference to Statement.......................... 1
1.2 Terms Defined Herein............................................. 1
1.3 Rules of Construction............................................ 2
2. THE AUCTION........................................................... 3
2.1 Purpose; Incorporation by Reference of Auction Procedures and
Settlement Procedures............................................ 3
2.2 Preparation of Each Auction; Maintenance of Registry of
Beneficial Owners................................................ 3
2.3 Information Concerning Rates..................................... 5
2.4 Auction Schedule................................................. 6
2.5 Designation of Dividend Period................................... 7
2.6 Notice of Auction Results........................................ 8
2.7 Broker-Dealers................................................... 8
2.8 Ownership of TAPS................................................ 9
2.9 Access to and Maintenance of Auction Records..................... 9
2.10 Dividend and Redemption Price Deposit............................ 9
3. THE AUCTION AGENT AS DIVIDEND AND REDEMPTION PRICE DISBURSING AGENT... 10
4. THE AUCTION AGENT AS TRANSFER AGENT AND REGISTRAR..................... 10
4.1 Issue of Share Certificates...................................... 10
4.2 Registration of Transfer of Shares............................... 10
4.3 Removal of Legend on Restricted Shares........................... 10
4.4 Lost Share Certificates.......................................... 10
4.5 Disposition of Canceled Certificates; Record Retention........... 11
4.6 Share Transfer Books............................................. 11
4.7 Return of Funds.................................................. 11
5. REPRESENTATIONS AND WARRANTIES OF THE FUND............................ 11
6. THE AUCTION AGENT..................................................... 12
6.1 Duties and Responsibilities...................................... 12
6.2 Rights of the Auction Agent...................................... 13
6.3 Auction Agent's Disclaimer....................................... 13
6.4 Compensation, Expenses and Indemnification....................... 14
7. MISCELLANEOUS......................................................... 14
7.1 Term of Agreement................................................ 14
7.2 Communications................................................... 15
7.3 Entire Agreement................................................. 15
7.4 Benefits......................................................... 15
7.5 Amendment; Waiver................................................ 15
7.6 Successors and Assigns........................................... 16
7.7 Severability..................................................... 16
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TABLE OF CONTENTS
(continued)
PAGE
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7.8 Execution in Counterparts........................................ 16
7.9 Governing Law.................................................... 16
7.10 Declaration of Trust............................................. 17
EXHIBITS
EXHIBIT A - Form of Broker-Dealer Agreement
EXHIBIT B - Settlement Procedures
EXHIBIT C - Form of Notice of Auction Dates
EXHIBIT D - Form of Notice of Proposed Designation of Special Rate Period
EXHIBIT E - Form of Notice of Designation of Special Rate Period
EXHIBIT F - Form of Notice of Determination Not to Designate Special Rate Period
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These basic terms ("Basic Terms") set forth the general terms and
conditions pursuant to which a bank or trust company identified in a Request and
Acceptance Letter will act as auction agent (an "Auction Agent") for Taxable
Auctioned Preferred Shares issued by an investment company registered under the
Investment Company Act of 1940, as amended, as further identified by such
Request and Acceptance Letter (a "Fund"), for which Nuveen Institutional
Advisory Corp. is the investment adviser.
The Fund proposes to issue shares of TAPS pursuant to its Declaration of
Trust, as amended or supplemented by the Statement. The Fund desires that the
Auction Agent perform certain duties in connection with the TAPS upon the terms
and subject to the conditions of the Agreement.
1. Definitions and Rules of Construction
1.1 Terms Defined by Reference to Statement. Capitalized terms not defined
herein shall have the respective meanings specified in the Statement.
1.2 Terms Defined Herein. As used herein and in the Settlement Procedures,
the following terms shall have the following meanings, unless the
context otherwise requires:
(a) "Adviser" shall mean Nuveen Institutional Advisory Corp.
(b) "Agent Member" of any Person shall mean the member of, or
participant in, the Securities Depository.
(c) "Agreement" shall mean the Basic Terms, together with the Request
and Acceptance Letter relating to one or more series of TAPS.
(d) "Auction" shall have the meaning specified in Section 2.1 hereof.
(e) "Auction Procedures" shall mean the auction procedures
constituting Part II of the Statement.
(f) "Authorized Officer" shall mean each Vice President, Assistant
Vice President and Assistant Treasurer of the Auction Agent
assigned to the Dealing and Trading Group of its Corporate Trust
and Division and every other officer or employee of the Auction
Agent designated as an "Authorized Officer" for purposes hereof
in a communication to the Fund.
(g) "Broker-Dealer Agreement" shall mean each agreement between the
Auction Agent and a Broker-Dealer substantially in the form
attached hereto as Exhibit A.
(h) "Fund Officer" shall mean the Chairman of the Board of Trustees
of the Fund, the President, each Vice President (whether or not
designated by a number or word or words added before or after the
title "Vice President"), the Secretary, the Treasurer, each
Assistant Secretary and each Assistant
Treasurer of the Fund and every other officer or employee of the
Fund designated as a "Fund Officer" for purposes hereof in a
notice to the Auction Agent.
(i) "Person" means and includes an individual, a partnership, a
corporation, a trust, an unincorporated association, a joint
venture or other entity or a government or any agency or
political subdivision thereof.
(j) "Request and Acceptance Letter" shall mean the letter from the
Fund to the Auction Agent pursuant to which the Fund appoints the
Auction Agent and the Auction Agent accepts its appointment as
auction agent for the TAPS.
(k) "Settlement Procedures" shall mean the Settlement Procedures
attached hereto as Exhibit B.
(l) "Statement" shall mean the Statement Establishing and Fixing the
Rights and Preferences of, and authorizing the issuance of, one
or more series of Taxable Auctioned Preferred Shares, as filed by
the Fund with the office of the Secretary of State or other
officer of the state where the Fund was incorporated or
organized, a copy of which is attached to the Request and
Acceptance Letter, as the same may be amended, supplemented or
modified from time to time.
(m) "TAPS" shall mean the preferred shares, par value $.01 per share,
of the Fund designated as its "Taxable Auctioned Preferred
Shares" and bearing such further designation as to series as the
Board of Trustees of the Fund or any committee thereof shall
specify; as set forth in the Request and Acceptance Letter.
1.3 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.
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2. The Auction
2.1 Purpose; Incorporation by Reference of Auction Procedures and
Settlement Procedures.
(a) The Statement provides that the Applicable Rate per annum for
each series of TAPS for each Dividend Period after the initial
Dividend Period with respect to each series of TAPS shall, except
under certain conditions, be equal to the rate per annum that a
bank or trust company appointed by the Fund advises has resulted
on the Business Day preceding the first day of such Dividend
Period from implementation of the Auction Procedures for such
series. Each periodic operation of the Auction Procedures is
hereinafter referred to as an "Auction." The Board of Trustees
has adopted a resolution appointing The Bank of New York as
Auction Agent for purposes of the Auction Procedures for each
series of the TAPS. The Auction Agent accepts such appointment
and agrees to follow the procedures set forth in this Section 2
and the Auction Procedures for the purpose of determining the
Applicable Rate for each series of TAPS for each Dividend Period
thereof for which the Applicable Rate is to be determined by 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 hereof to the
same extent as if such provisions were fully set forth herein.
2.2 Preparation of Each Auction; Maintenance of Registry of Beneficial
Owners.
(a) Not later than seven days prior to the first Auction Date for any
series of TAPS, the Fund shall provide the Auction Agent with a
list of the Broker-Dealers. Not later than seven days prior to
any Auction Date for any series of TAPS for which any change in
such list of Broker-Dealers is to be effective, the Fund will
notify the Auction Agent in writing of such change and, if any
such change involves the addition of a Broker-Dealer to such
list, shall cause to be delivered to the Auction Agent for
execution by the Auction Agent a Broker-Dealer Agreement signed
by such Broker-Dealer; provided, however, that if the Fund
proposes to designate any Special Rate Period of any series of
TAPS pursuant to Section 4 of Part I of the Statement, not later
than 11:00 A.M., New York City time, on the Business Day next
preceding the Auction next preceding the first day of such
Special Rate Period, upon the written request of the Auction
Agent, the Fund shall provide the Auction Agent with a list of
the Broker-Dealers for such series. The Auction Agent and the
Fund shall have entered into a Broker-Dealer Agreement with each
Broker-Dealer prior to the participation of any such
Broker-Dealer in any Auction.
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(b) In the event that any Auction Date for any series of TAPS shall
be changed after the Auction Agent shall have given the notice
referred to in clause (vi) or (vii) of paragraph (a) of the
Settlement Procedures, or after the notice referred to in Section
2.5(a) hereof, if applicable, the Auction Agent, by such means as
the Auction Agent deems practicable, shall give notice of such
change to the Broker-Dealers for such series not later than the
earlier of 9:15 A.M. on the new Auction Date or 9:15 A.M. on the
old Auction Date.
(c) (i) The Auction Agent shall maintain a registry of the beneficial
owners of the shares of each series of TAPS who shall constitute
Existing Holders of shares of such series of TAPS for purposes of
Auctions and shall indicate thereon the identity of the
respective Broker-Dealer of each Existing Holder, if any, on
whose behalf such Broker-Dealer submitted the most recent Order
in any Auction which resulted in such Existing Holder continuing
to hold or purchasing shares of such series of TAPS. The Auction
Agent shall keep such registry current and accurate. The Fund
shall provide or cause to be provided to the Auction Agent at or
prior to the Date of Original Issue of each series of TAPS a list
of the initial Existing Holders of the shares of each such
series, the number of shares purchased by each such Existing
Holder and the respective Broker-Dealer of each such Existing
Holder or the affiliate thereof through which each such Existing
Holder purchased such shares. The Auction Agent shall advise the
Fund as to whether the number of Existing Holders is 500 or more
or any Existing Holder owns 5% or more of the outstanding shares
of any series of TAPS. The Auction Agent may rely upon, as
conclusive evidence of the identities of the Existing Holders of
shares of any series of TAPS, (A) such list, (B) the results of
Auctions (C) notices from any Broker-Dealer as described in the
first sentence of Section 2.2(c)(iii) hereof and (D) the results
of any procedures approved by the Fund that have been devised for
the purpose of determining the identities of Existing Holders in
situations where shares of TAPS may have been transferred without
compliance with any restriction on the transfer thereof set forth
in the Auction Procedures.
(ii) In the event of any partial redemption of any series of
TAPS, the Auction Agent shall, at least two Business Days
prior to the next Auction for such series, request each
Broker-Dealer to provide the Auction Agent with a list of
Persons who such Broker-Dealer believes should remain
Existing Holders after such redemption based upon inquiries
of those Persons such Broker-Dealer believes are Beneficial
Owners as a result of the most recent Auction and with
respect to each such Person, the number of shares of TAPS of
such series such Broker-Dealer believes are owned by such
Person after such redemption. In the absence of receiving
any such information from any Broker-Dealer, the Auction
Agent may continue to treat the Persons listed in its
registry of Existing
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Holders as the beneficial owner of the number of shares of
TAPS of such series shown in such registry.
(iii) The Auction Agent shall be required to register a transfer
of shares of TAPS of any series from an Existing Holder of
such shares of TAPS only if such transfer is to another
Existing Holder, or other Person if permitted by the Fund,
and only if such transfer is made (A) pursuant to an
Auction, (B) the Auction Agent has been notified in writing
(I) in a notice substantially in the form of Exhibit C to
the Broker-Dealer Agreements by a Broker-Dealer of such
transfer or (II) in a notice substantially in the form of
Exhibit D to the Broker-Dealer Agreements by the
Broker-Dealer of any Existing Holder, or other Person if
permitted by the Fund, that purchased or sold such shares of
TAPS in an Auction of the failure of such shares of TAPS to
be transferred as a result of such Auction or (C) pursuant
to procedures approved by the Fund that have been devised
for the purpose of determining the identities of Existing
Holders in situations where shares of TAPS may have been
transferred without compliance with any restriction on the
transfer thereof set forth in the Auction Procedures. The
Auction Agent is not required to accept any such notice for
an Auction unless it is received by the Auction Agent by
3:00 P.M. on the Business Day preceding such Auction.
(d) The Auction Agent may request the Broker-Dealers, as set forth in
the Broker-Dealer Agreements, to provide the Auction Agent with a
list of Persons who such Broker-Dealer believes should be
Existing Holders based upon inquiries of those Persons such
Broker-Dealer believes are Beneficial Owners as a result of the
most recent Auction and with respect to each such Person, the
number of shares of such series of TAPS such Broker-Dealer
believes to be owned by such Person. The Auction Agent shall keep
confidential such registry of Existing Holders and shall not
disclose the identities of the Existing Holders of such shares of
TAPS to any Person other than the Fund and the Broker-Dealer that
provided such information; provided, however, that the Auction
Agent reserves the right and is authorized to disclose any such
information if (a) it is ordered to do so by a court of competent
jurisdiction or a regulatory body, judicial or quasi-judicial
agency or authority having the authority to compel such
disclosure, (b) it is advised by its counsel that its failure to
do so would be unlawful or (c) failure to do so would expose the
Auction Agent to loss, liability, claim, damage or expense for
which it has not received indemnity or security satisfactory to
it.
2.3 Information Concerning Rates.
(a) On each Auction Date, the Auction Agent shall determine the AA
Composite Commercial Paper Rate or the Treasury Index Rate, as
the case
5
may be, and the Minimum Rate and Maximum Rate. If the AA
Composite Commercial Paper Rate or the Treasury Index Rate, as
the case may be, is not quoted on an interest basis, if the rate
obtained by the Auction Agent is quoted on a discount basis, or
if the rate obtained by the Auction Agent is quoted on another
basis the Auction Agent shall convert the quoted rate to an
interest rate after consultation with the Fund as to the method
of such conversion. Not later than 9:30 A.M. on each Auction Date
the Auction Agent shall notify the Fund and the Broker-Dealers of
the Minimum Rate and Maximum Rate so determined and the AA
Composite Commercial Paper Rate or the Treasury Index Rate, as
the case may be, used to make such determination.
(b) If any AA Composite Commercial Paper Rate is to be based on rates
supplied by Commercial Paper Dealers and one or more of the
Commercial Paper Dealers shall not provide a quotation for the
determination of such AA Composite Commercial Paper Rate, the
Auction Agent shall promptly notify the Fund so that the Fund can
determine whether to select a substitute Commercial Paper Dealer
or substitute Commercial Paper Dealers to provide the quotation
or quotations not being supplied by any Commercial Paper Dealer
or Commercial Paper Dealers. The Fund shall promptly advise the
Auction Agent of any such selection.
(c) If any Treasury Index Rate is to be based on rates supplied by
U.S. Government Securities Dealers and one or more of the U.S.
Government Securities Dealers shall not provide a quotation for
the determination of such Treasury Rate, the Auction Agent shall
promptly notify the Fund so that the Fund can determine whether
to select a Substitute U.S. Government Securities Dealer or
Substitute U.S. Government Securities Dealers to provide the
quotation or quotations not being supplied by any U.S. Government
Securities Dealers. The Fund shall promptly advise the Auction
Agent of any such selection.
2.4 Auction Schedule. The Auction Agent shall conduct Auctions for each
series of TAPS in accordance with the schedule set forth below. Such
schedule may be changed by the Auction Agent with the consent of the
Fund, which consent shall not be unreasonably withheld or delayed. The
Auction Agent shall give written notice of any such change to each
Broker-Dealer. Such notice shall be given 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 9:30 A.M. Auction Agent advises the Fund and Broker-Dealers of
the applicable Minimum Rate and Maximum Rate and the
Reference Rate(s) used in determining such Minimum
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Time Event
---- -----
Rate and Maximum Rate as set forth in Section 2.3(a)
hereof.
9:30 A.M. - 12:30 P.M. Auction Agent assembles information communicated to it
by Broker-Dealers as provided in Section 2(a) of the
Auction Procedures. Submission Deadline is 1:00 P.M.
Not earlier than 12:30 P.M. Auction Agent makes determinations pursuant to
Section 3(a) of the Auction Procedures.
By approximately 3:00 P.M. Auction Agent advises Fund of results of Auction as
provided in Section 3(b) of the Auction Procedures.
Submitted Bids and Submitted Sell Orders are accepted
and rejected and shares of TAPS allocated as provided
in Section 4 of the Auction Procedures. Auction Agent
gives notice of Auction results as set forth in
paragraph (a) of the Settlement Procedures.
The Auction Agent shall follow the notification procedures set forth in
paragraph (a) of the Settlement Procedures.
2.5 Designation of Dividend Period.
(a) The Statement provides that the Fund will designate the duration
of subsequent Dividend Periods; provided, however, that no such
designation is necessary for a Standard Rate Period; provided,
however, that any designation of a Special Rate Period shall be
effective only if (i) notice thereof shall have been given as
provided herein, (ii) any failure to pay in a timely manner to
the Auction Agent the full amount of any dividend on, or the
redemption price of, the TAPS shall have been cured, (iii)
Sufficient Clearing Bids shall have existed in an Auction held on
the Auction Date immediately preceding the first day of such
proposed Dividend Period other than a Standard Rate Period, (iv)
if the Fund shall have mailed a Notice of Redemption with respect
to any shares, the Redemption Price with respect to such shares
shall have been deposited with the Paying Agent, and (v) in the
case of the designation of a Special Rate Period, as of the
Auction Date next preceding the first day of such Special Rate
Period it has Eligible Assets with an aggregate Discounted Value
at least equal to the TAPS Basic Maintenance Amount and the Fund
has consulted with the Broker-Dealers and has provided notice of
each designation and a TAPS Basic Maintenance Report to Moody's
(if Xxxxx'x is then rating the TAPS), Fitch (if Fitch is then
rating the TAPS) and any Other Rating Agency which is then rating
the TAPS and so requires.
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(b) Pursuant to the Statement, the Fund may, at its option, designate
a Special Rate Period for any series of TAPS in the manner
described below and in Section 4 of Part I of the Statement. If
the Fund proposes to designate any succeeding Special Rate Period
the Fund shall deliver to the Auction Agent:
(i) A notice of such proposed Special Rate Period in the form of
Exhibit D hereto not less than 7 (or 2 in the event the
duration of the Dividend Period is fewer than 8 days) nor
more than 30 Business Days prior to the first day of such
proposed Special Rate Period. The Auction Agent on behalf of
the Fund shall deliver such notice by any electronic means
acceptable to Existing Holders to each Existing Holder of
shares of such series of TAPS at the address set forth for
such Existing Holder in the records of the Auction Agent and
to the Broker-Dealers for such series as promptly as
practicable after its receipt of such notice from the Fund.
(ii) A notice in the form of Exhibit E or F hereto not later than
2:30 P.M. on the second Business Day next preceding the
first day of such proposed Special Rate Period, of either
(x) its determination, subject to certain conditions, to
proceed with such Special Rate Period, in which case the
Fund shall specify the terms of the Specific Redemption
Provisions, if any, or (y) its determination not to proceed
with such Special Rate Period in which latter event the
succeeding Dividend Period shall be a Standard Rate Period.
The Auction Agent shall promptly deliver such notice to the
Broker-Dealers, but in no event later than 3:00 P.M. on the
date of such notice.
(iii) If the Fund fails to deliver either such notice with
respect to any designation of any proposed Special Rate
Period to the Auction Agent by 2:30 P.M., New York City
time, on the second Business Day next preceding the first
day of such proposed Special Rate Period, the Fund shall be
deemed to have delivered a notice to the Auction Agent with
respect to such Dividend Period to the effect that it has
determined not to proceed with the designation of a Special
Rate Period, thereby resulting in a Standard Rate Period.
2.6 Notice of Auction Results. On each Auction Date for any series of
TAPS, the Auction Agent shall notify Broker-Dealers of the results of
the Auction held on such date by telephone as set forth in paragraph
(a) of the Settlement Procedures.
2.7 Broker-Dealers.
(a) Not later than 12:00 Noon on each Auction Date for any series of
TAPS, the Fund shall pay to the Auction Agent an amount in cash
equal to the
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aggregate fees payable to the Broker-Dealers for such series
pursuant to Section 2.6 of the Broker-Dealer Agreement for such
series. The Auction Agent shall apply such moneys as set forth in
Section 2.6 of each such Broker-Dealer Agreement.
(b) The Fund shall obtain the consent of the Auction Agent prior to
selecting any Person to act as a Broker-Dealer, which consent
shall not be unreasonably withheld.
(c) The Auction Agent shall terminate any Broker-Dealer Agreement as
set forth therein if so directed by the Fund.
(d) Subject to the Auction Agent's having consented to the selection
of the relevant Broker-Dealer pursuant to Section 2.8(b) hereof,
the Auction Agent shall from time to time enter into such
Broker-Dealer Agreements with one or more Broker-Dealers as the
Fund shall request, and shall enter into such schedules to any
such Broker-Dealer Agreements as the Fund shall request, which
schedules, among other things, shall set forth the series of TAPS
to which such Broker-Dealer Agreement relates.
2.8 Ownership of TAPS. The Fund shall notify the Auction Agent if the Fund
or any affiliate of the Fund acquires any shares of TAPS of any
series. Neither the Fund nor any affiliate of the Fund shall submit
any Order in any Auction for TAPS, except as set forth in the next
sentence. Any Broker-Dealer that is an affiliate of the Fund may
submit Orders in Auctions, but only if such Orders are not for its own
account. For purposes of this Section 2.8, a Broker-Dealer shall not
be deemed to be an affiliate of the Fund solely because one or more of
the directors or executive officers of such Broker-Dealer or of any
Person controlled by, in control of or under common control with such
Broker-Dealer is also a Director of the Fund. The Auction Agent shall
have no duty or liability with respect to enforcement of this Section
2.8.
2.9 Access to and Maintenance of Auction Records. The Auction Agent shall,
upon the receipt of prior written notice from the Fund, afford to the
Fund access at reasonable times during normal business hours to all
books, records, documents and other information concerning the conduct
and results of Auctions. The Auction Agent shall maintain records
relating to an Auction for a period of six years after such Auction
and such records shall, in reasonable detail, accurately and fairly
reflect the actions taken by the Auction Agent hereunder.
2.10 Dividend and Redemption Price Deposit. The Fund shall pay to the
Auction Agent, not later than 12:00 noon, New York City time, (A) on
the Business Day next preceding any Dividend Payment Date for any
series of TAPS, in funds available on such Dividend Payment Date in
The City of New York, New York, the full amount of any dividends to be
paid on such Dividend Payment Date on any share of such series, and
(B) on the Business Day next preceding any redemption date for any
series of TAPS in funds available on such redemption
9
date for such series in The City of New York, New York, the Redemption
Price to be paid on such redemption date for the shares of any such
series after notice of redemption is given as set forth in the
Statement.
3. The Auction Agent as Dividend and Redemption Price Disbursing Agent
The Auction Agent, as dividend and redemption price disbursing agent, shall
pay to the Holders of shares of TAPS of any series (i) on each Dividend Payment
Date for such series, dividends on the shares of TAPS of such series, (ii) on
any date fixed for redemption of shares of TAPS of any series, the Redemption
Price of any shares of such series called for redemption and (iii) any late
charge related to any payment of dividends or Redemption Price, in each case
after receipt of the necessary funds from the Fund with which to pay such
dividends, Redemption Price or late charge. The amount of dividends for any
Dividend Period for any series of TAPS to be paid by the Auction Agent to the
Holders of such shares of such series will be determined by the Fund as set
forth in Section 2 of Part I of the Statement with respect to such series. The
Redemption Price of any shares to be paid by the Auction Agent to the Holders
will be determined by the Fund as set forth in Section 3 of Part I of the
Statement with respect to such series. The Fund shall notify the Auction Agent
in writing of a decision to redeem shares of any series of TAPS as provided in
paragraph (b) of Section 3 of Part I of the Statement. Such notice by the Fund
to the Auction Agent shall contain the information required by paragraph (b) of
Section 3 of Part I of the Statement to be stated in the notice of redemption
required to be mailed by the Auction Agent to such Holders.
4. The Auction Agent as Transfer Agent and Registrar
4.1 Issue of Share Certificates. Upon the Date of Original Issue of each
series of TAPS, one certificate representing all of the shares of each
series issued on such date shall be issued by the Fund and, at the
request of the Fund, registered in the name of Cede & Co. and
countersigned by the Auction Agent.
4.2 Registration of Transfer of Shares. Shares of each series of TAPS
shall be registered solely in the name of the Securities Depository or
its nominee.
4.3 Removal of Legend on Restricted Shares. All requests for removal of
legends on shares of any series of TAPS indicating restrictions on
transfer shall be accompanied by an opinion of counsel stating that
such legends may be removed and such shares freely transferred, such
opinion to be delivered under cover of a letter from a Fund Officer
authorizing the Auction Agent to remove the legend on the basis of
said opinion.
4.4 Lost Share Certificates. The Auction Agent shall register replacement
certificates for certificates represented to have been lost, stolen or
destroyed upon the fulfillment of such requirements as shall be deemed
appropriate by the Fund and the Auction Agent, subject at all times to
provisions of law, the By-Laws of the Fund governing such matters and
resolutions adopted by the Fund with respect to lost securities. The
Auction Agent may issue new certificates in exchange for and upon the
cancellation of mutilated certificates. Any request by the Fund to the
10
Auction Agent to issue a replacement or new certificate pursuant to
this Section 4.4 shall be deemed to be a representation and warranty
by the Fund to the Auction Agent that such issuance will comply with
such provisions of law and the By-Laws and resolutions of the Fund.
4.5 Disposition of Canceled Certificates; Record Retention. The Auction
Agent shall retain all share certificates which have been cancelled in
transfer or exchange and all accompanying documentation in accordance
with applicable rules and regulations of the Securities and Exchange
Commission for two calendar years. Upon the expiration of this
two-year period, the Auction Agent shall deliver to the Fund the
cancelled certificates and accompanying documentation. The Fund also
shall undertake to furnish to the Securities and Exchange Commission
and to the Board of Governors of the Federal Reserve System, upon
demand, at either the principal office or at any regional office,
complete, correct and current hard copies of any and all such records.
Thereafter such records shall not be destroyed by the Fund without the
concurrence of the Auction Agent.
4.6 Share Transfer Books. For so long as the Auction Agent is acting as
the transfer agent for any series of TAPS pursuant to this Agreement,
it shall maintain a share transfer book containing a list of the
Holders of the shares of each series of TAPS, the number of shares of
each series held by such Holders and the address of each Holder. The
Auction Agent shall record in such share transfer books any change of
address of a Holder upon notice by such Holder. In case of any request
or demand for the inspection of the share transfer books of the Fund
or any other books in the possession of the Auction Agent, the Auction
Agent will notify the Fund and secure instructions as to permitting or
refusing such inspection.
4.7 Return of Funds. Any funds deposited with the Auction Agent hereunder
by the Fund for any reason, including but not limited to redemption of
shares of TAPS of any series, that remain unpaid after 90 days shall
be repaid to the Fund upon the written request of the Fund, together
with interest, if any, earned thereon.
5. Representations and Warranties of the Fund
The Fund represents and warrants to the Auction Agent that:
(a) the Fund is a duly organized and existing business trust in good
standing under the laws of the State of Massachusetts and has
full corporate power or all requisite power to execute and
deliver the Agreement and to authorize, create and issue the
shares of TAPS of each series and the shares of TAPS of each
series when issued, will be duly authorized, validly issued,
fully paid and nonassessable;
(b) the Agreement has been duly and validly authorized, executed and
delivered by the Fund and constitutes the legal, valid and
binding obligation of the Fund;
11
(c) the form of the certificate evidencing the shares of TAPS of each
series complies or will comply with all applicable laws of the
State of Massachusetts;
(d) when issued, the shares of TAPS of each series will have been
duly registered under the Securities Act of 1933, as amended, and
no further action by or before any governmental body or authority
of the United States or of any state thereof is required in
connection with the execution and delivery of the Agreement or
will have been required in connection with the issuance of the
shares of TAPS of each series; and
(e) the execution and delivery of the Agreement and the issuance and
delivery of the shares of TAPS of each series do not and will not
conflict with, violate or result in a breach of, the terms,
conditions or provisions of, or constitute a default under, the
Declaration of Trust (as amended by one or more Statements) or
the By-Laws of the Fund, any law or regulation, any order or
decree of any court or public authority having jurisdiction, or
any mortgage, indenture, contract, agreement or undertaking to
which the Fund is a party or by which it is bound the effect of
which conflict, violation, default or breach would be material to
the Fund or the Fund and its subsidiaries taken as a whole.
6. The Auction Agent
6.1 Duties and Responsibilities.
(a) The Auction Agent is acting solely as agent for the Fund
hereunder and owes no duties, fiduciary or otherwise, to any
other 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 the
Broker-Dealer Agreements, and no implied covenants or obligations
shall be read into this Agreement against the Auction Agent.
(c) In the absence of willful misconduct 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 except that
the Auction Agent shall be liable for any error of judgment made
in good faith if the Auction Agent shall have been negligent in
ascertaining the pertinent facts.
(d) Any funds deposited with the Auction Agent hereunder by the Fund
for any reason, including the payment of dividends or the
redemption of shares of TAPS of any series, that remain with the
Auction Agent after 90 days shall be repaid to the Fund as
provided in Section 4.7 hereof.
12
6.2 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 hereby and upon any written instruction, notice,
request, direction, consent, report, certificate, share
certificate or other instrument, paper or document believed in
good faith by it to be genuine. The Auction Agent shall not be
liable for acting upon any telephone communication authorized
hereby which the Auction Agent believes in good faith to have
been given by the Fund or by any Broker-Dealer. The Auction Agent
may record telephone communications with the Fund or with any
Broker-Dealer.
(b) The Auction Agent may consult with counsel and the reasonable
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 on the part of
any agent or attorney appointed by it with due care hereunder
except as set forth above in Section 6.1(c).
(e) The Auction Agent shall not be responsible or liable for any
failure or delay in the performance of its obligations under this
agreement arising out of or caused, directly or indirectly, by
circumstances beyond its reasonable control, including, without
limitation, acts of God; earthquakes; fires, floods; wars; civil
or military disturbances; sabotage; epidemics; riots;
interruptions, loss or malfunctions of utilities; computer
(hardware or software) or communications services; accidents;
labor disputes; acts of civil or military authority or
governmental actions; it being understood that the Auction Agent
shall use reasonable efforts which are consistent with accepted
practices in the banking industry to resume performance as soon
as practicable under the circumstances.
6.3 Auction Agent's Disclaimer. The Auction Agent makes no representation
as to the validity or adequacy of this Agreement (except as to the
Auction Agent's duties hereunder and that the Auction Agent hereby
represents that this Agreement has been duly authorized, executed and
delivered by the Auction Agent and constitutes a legal and binding
obligation of the Auction Agent), the TAPS, or any other document
related to the TAPS.
13
6.4 Compensation, Expenses and Indemnification.
(a) The Fund shall pay the Auction Agent from time to time reasonable
compensation for all services rendered by it under this Agreement
and the Broker-Dealer Agreement in such amounts as may be agreed
to by the Fund and the Auction Agent from time to time.
(b) The Fund shall reimburse the Auction Agent upon its request for
all reasonable out-of-pocket expenses, disbursements and advances
incurred or made by the Auction Agent in accordance with any
provision of this Agreement and the Broker-Dealer Agreements
(including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any expense or
disbursement attributable to its negligence or willful
misconduct.
(c) The Fund shall indemnify the Auction Agent for and hold it
harmless against, any loss, liability or expense incurred without
negligence or willful misconduct on its part, arising out of or
in connection with its agency under this Agreement and the
Broker-Dealer Agreements, including the costs and expenses of
defending itself against any claim or liability in connection
with its exercise or performance of its duties hereunder and
thereunder.
7. Miscellaneous
7.1 Term of Agreement.
(a) The term of this Agreement is unlimited unless it shall be
terminated as provided in this Section 7.1. The Fund may
terminate this Agreement any time by so notifying the Auction
Agent, provided that the Fund has entered into an agreement in
substantially the form of this Agreement with a successor auction
agent. The Auction Agent may terminate this Agreement upon
written notice to the Fund, such termination to be effective on
the earlier of (i) the date specified in such notice which shall
not be earlier than 45 days after the giving of such notice or
(ii) the date on which a successor Auction Agent is appointed by
the Fund pursuant to an agreement containing substantially the
same terms and conditions as this Agreement.
(b) Except as otherwise provided in this paragraph (b), the
respective rights and duties of the Fund and the Auction Agent
under this Agreement shall cease upon termination of this
Agreement. The Fund's obligations under Section 6.4 hereof and
its representations and warranties contained in Section 5 hereof
and the Auction Agent's obligations and liabilities under
Sections 2.9 and 4.5 hereof shall survive the termination hereof
with respect to any Series of TAPS. Upon termination of this
Agreement, the Auction Agent shall, at the Fund's request,
promptly deliver to the Fund
14
copies of all books and records maintained by it in connection
with its duties hereunder.
7.2 Communications. Except for (a) communications authorized to be by
telephone pursuant to this Agreement or the Auction Procedures and (b)
communications in connection with Auctions (other than those expressly
required to be in writing) and unless otherwise specified by the terms
of this Agreement, all notices, requests and other communications to
any party hereunder shall be in writing (including telecopy or similar
writing) given to such person at its address or telecopy number set
forth below:
If to the Fund, addressed:
[Name of Fund]
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx
Telephone No.: (000) 000-0000
If to the Auction Agent, to the address or telecopy number set forth
in the Request and Acceptance Letter.
or to such other address as the party to whom the communication is addressed
shall have previously communicated to the other party. Communications shall be
given on behalf of the Fund by a Fund Officer and on behalf of the Auction Agent
by an Authorized Officer. Communications shall be effective when received at the
proper address.
7.3 Entire Agreement. This Agreement contains the entire agreement among
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 except for agreements relating
to compensation of the Auction Agent. This Agreement supersedes all
prior agreements between the parties relating to the subject matter of
this Agreement.
7.4 Benefits. Nothing herein, express or implied, shall give to any
Person, other than the Fund, the Auction Agent and their respective
successors and assigns, any benefit of any legal or equitable right,
remedy or claim hereunder.
7.5 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.
15
(b) Failure of either party hereto to exercise any right or remedy
hereunder in the event of a breach hereof by the other party
shall not constitute a waiver of any such rights or remedies with
respect to any subsequent breach.
7.6 Successors and Assigns. This Agreement shall be binding upon, inure to
the benefit of, and be enforceable by, the respective successors of
each of the Fund and the Auction Agent.
7.7 Severability. If any clause, provision or section hereof 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 of the remaining clauses, provisions or
sections hereof.
7.8 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.
7.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
16
7.10 Declaration of Trust. The Fund's Declaration is on file with the
Secretary of State of the Commonwealth of Massachusetts. This
Agreement has been executed on behalf of the Fund by the Vice
President and Treasurer of the Fund acting in such capacity and not
individually, and the obligations of the Fund set forth in this
Agreement are not binding upon any of the Fund's trustees, officers or
shareholders individually, but are binding only upon the assets and
property of the Fund.
17
EXHIBIT A
BROKER-DEALER AGREEMENT
A-1
EXHIBIT B
SETTLEMENT PROCEDURES
B-1
EXHIBIT C
[NAME OF FUND]
NOTICE OF AUCTION DATE FOR
TAXABLE AUCTIONED PREFERRED SHARES ("TAPS")
NOTICE IS HEREBY GIVEN that the Auction Date of the next Auction for the
TAPS Series ___ of the [Name of Fund] (the "Fund") is scheduled to be
____________ and the next Dividend Payment Date for Series ____ of the Fund's
TAPS will be _______________.
Dated: [Name of Fund]
------------------------------
C-1
EXHIBIT D
[NAME OF FUND]
NOTICE OF PROPOSED DESIGNATION OF
SPECIAL RATE PERIOD FOR
TAXABLE AUCTIONED PREFERRED SHARES ("TAPS")
NOTICE IS HEREBY GIVEN that [Name of Fund] (the "Fund") proposes to
exercise its option to designate the Dividend Period of its Series __ TAPS
commencing [the first day of the proposed Special Rate Period] and ending [the
last day of the proposed Special Rate Period] as a Special Rate Period.
By 9:00 A.M., New York City time, on the Business Day next preceding the
first day of such proposed Special Rate Period, the Fund will notify the Auction
Agent for the TAPS of either (a) its determination to exercise such option,
designating the length of such Special Rate Period and the terms of the Specific
Redemption Provisions, if any, or (b) its determination not to exercise such
option.
Dated: [Name of Fund]
------------------------------
D-1
EXHIBIT E
[NAME OF FUND]
NOTICE OF DESIGNATION OF SPECIAL RATE PERIOD OF
TAXABLE AUCTIONED PREFERRED SHARES ("TAPS")
NOTICE IS HEREBY GIVEN that [Name of Fund] (the "Fund") has determined to
designate the Dividend Period of its Series __ TAPS commencing on [the first day
of the Special Rate Period] and ending on (the last day of the Special Rate
Period] as a Special Rate Period.
The Special Rate Period will be _____ [days] year(s]].
The Auction Date for the Special Rate Period is (the Business Day next
preceding the first day of such Special Rate Period].
The scheduled Dividend Payment Dates for such series of TAPS during such
Special Rate Period will be ____________________.
[Specific Redemption Provisions, if applicable.]
[The Special Rate Period shall not commence if on such Auction Date
Sufficient Clearing Bids shall not exist.]
Dated: [Name of Fund]
------------------------------
E-1
EXHIBIT F
[NAME OF FUND]
NOTICE OF DETERMINATION NOT TO DESIGNATE
SPECIAL RATE PERIOD OF
TAXABLE AUCTIONED PREFERRED SHARES ("TAPS")
NOTICE IS HEREBY GIVEN that [Name of Fund] (the "Fund") has determined not to
exercise its option to designate a Special Rate Period of its Series __ TAPS.
Accordingly, the next succeeding Dividend Period of such series will be a
Standard Rate Period.
Dated: [Name of Fund]
------------------------------
F-1
