Exhibit k.3
NUVEEN AUCTION AGENCY AGREEMENT
Basic Terms for Acting as Auction Agent
Relating to
FUNDPREFERRED SHARES
August 22, 2002
TABLE OF CONTENTS
PAGE
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............................... 6
2.4 Auction Schedule........................................... 6
2.5 Designation of Dividend Period............................. 7
2.6 Notice of Auction Results.................................. 9
2.7 Broker-Dealers............................................. 9
2.8 Ownership of FundPreferred Shares.......................... 9
2.9 Access to and Maintenance of Auction Records............... 9
2.10 Dividend and Redemption Price Deposit...................... 10
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.................................... 11
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.......................... 12
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................................. 14
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................................................... 16
7.5 Amendment; Waiver.......................................... 16
7.6 Successors and Assigns..................................... 16
7.7 Severability............................................... 16
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TABLE OF CONTENTS
(continued)
PAGE
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
FundPreferred 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 FundPreferred shares 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
FundPreferred shares 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 FundPreferred shares.
(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) "FundPreferred shares" shall mean the preferred shares, par
value $.01 per share, of the Fund designated as its
"FundPreferred 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.
(j) "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.
(k) "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 FundPreferred shares.
(l) "Settlement Procedures" shall mean the Settlement Procedures
attached hereto as Exhibit B.
(m) "Statement" shall mean the Statement Establishing and Fixing
the Rights and Preferences of, and authorizing the issuance
of, one or more series of FundPreferred 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.
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," "hereby,"
"hereunder," 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.
2
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 FundPreferred shares for each Dividend Period
after the initial Dividend Period with respect to each series
of FundPreferred shares 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 FundPreferred shares. 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 FundPreferred shares 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 FundPreferred shares, 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 FundPreferred shares 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 FundPreferred shares 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
FundPreferred shares 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
original Auction Date.
(c) (i) The Auction Agent shall maintain a registry of the
beneficial owners of the shares of each series of
FundPreferred shares who shall constitute Existing Holders of
shares of such series of FundPreferred shares 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
FundPreferred shares. 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 FundPreferred shares
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 FundPreferred
shares. The Auction Agent may rely upon, as conclusive
evidence of the identities of the Existing Holders of shares
of any series of FundPreferred shares, (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
FundPreferred shares 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
FundPreferred shares, 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
FundPreferred shares of such series such Broker-Dealer
believes are owned by such Person after such redemption.
In the absence of receiving any such information
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from any Broker-Dealer, the Auction Agent may continue
to treat the Persons listed in its registry of Existing
Holders as the beneficial owner of the number of shares
of FundPreferred shares of such series shown in such
registry.
(iii) The Auction Agent shall be required to register a
transfer of shares of FundPreferred shares of any series
from an Existing Holder of such shares of FundPreferred
shares 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
FundPreferred shares in an Auction of the failure of
such shares of FundPreferred shares 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 FundPreferred
shares 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
FundPreferred shares 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
FundPreferred shares 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.
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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 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 FundPreferred shares 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.
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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
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 Auction Agent makes determinations pursuant to
12:30 P.M. Section 3(a) of the Auction Procedures.
By approximately Auction Agent advises Fund of results of
3:00 P.M. Auction as provided in Section 3(b) of the
Auction Procedures.
Submitted Bids and Submitted Sell Orders are
accepted and rejected and shares of
FundPreferred shares 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
FundPreferred shares 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
FundPreferred shares Basic Maintenance
7
Amount and the Fund has consulted with the Broker-Dealers and
has provided notice of each designation and a FundPreferred
shares Basic Maintenance Report to Moody's (if Xxxxx'x is
then rating the FundPreferred shares), Fitch (if Fitch is
then rating the FundPreferred shares) and any Other Rating
Agency which is then rating the FundPreferred shares and so
requires.
(b) Pursuant to the Statement, the Fund may, at its option,
designate a Special Rate Period for any series of
FundPreferred shares 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 FundPreferred shares 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.
8
2.6 Notice of Auction Results. On each Auction Date for any series of
FundPreferred shares, 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 FundPreferred shares, the Fund shall pay to the Auction
Agent an amount in cash equal to the 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 FundPreferred shares to which
such Broker-Dealer Agreement relates.
2.8 Ownership of FundPreferred Shares. The Fund shall notify the
Auction Agent if the Fund or any affiliate of the Fund acquires
any shares of FundPreferred shares of any series. Neither the Fund
nor any affiliate of the Fund shall submit any Order in any
Auction for FundPreferred shares, 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
9
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 FundPreferred shares, 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 FundPreferred
shares in funds available on such redemption 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 FundPreferred shares of any series (i) on
each Dividend Payment Date for such series, dividends on the shares of
FundPreferred shares of such series, (ii) on any date fixed for redemption of
shares of FundPreferred shares 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 FundPreferred shares 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 FundPreferred shares 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 FundPreferred shares, 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
FundPreferred shares 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 FundPreferred shares
indicating restrictions on transfer shall be accompanied by an
opinion of counsel stating that such legends may be
10
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 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 FundPreferred shares
pursuant to this Agreement, it shall maintain a share transfer
book containing a list of the Holders of the shares of each series
of FundPreferred shares, 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 FundPreferred shares 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.
11
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 FundPreferred shares of each series
and the shares of FundPreferred shares 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;
(c) the form of the certificate evidencing the shares of
FundPreferred shares of each series complies or will comply
with all applicable laws of the State of Massachusetts;
(d) when issued, the shares of FundPreferred shares 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
FundPreferred shares of each series; and
(e) the execution and delivery of the Agreement and the issuance
and delivery of the shares of FundPreferred shares 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
12
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 FundPreferred shares 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.
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; acts of terrorism;
13
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 FundPreferred shares, or any other document related to the
FundPreferred shares.
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
14
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
FundPreferred shares. Upon termination of this Agreement, the
Auction Agent shall, at the Fund's request, promptly deliver
to the Fund 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
15
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.
(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.
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.
16
EXHIBIT A
BROKER-DEALER AGREEMENT
A-1
EXHIBIT B
SETTLEMENT PROCEDURES
B-1
EXHIBIT C
[NAME OF FUND]
NOTICE OF AUCTION DATE FOR
FUNDPREFERRED SHARES ("FundPreferred shares")
NOTICE IS HEREBY GIVEN that the Auction Date of the next Auction for
the FundPreferred shares Series ___ of the [Name of Fund] (the "Fund") is
scheduled to be ____________ and the next Dividend Payment Date for Series ____
of the Fund's FundPreferred shares will be _______________.
Dated: ______________________________ [Name of Fund]
C-1
EXHIBIT D
[NAME OF FUND]
NOTICE OF PROPOSED DESIGNATION OF
SPECIAL RATE PERIOD FOR
FUNDPREFERRED SHARES ("FundPreferred shares")
NOTICE IS HEREBY GIVEN that [Name of Fund] (the "Fund") proposes to
exercise its option to designate the Dividend Period of its Series __
FundPreferred shares 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 FundPreferred shares 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
FUNDPREFERRED SHARES ("FundPreferred shares")
NOTICE IS HEREBY GIVEN that [Name of Fund] (the "Fund") has determined
to designate the Dividend Period of its Series __ FundPreferred shares
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 FundPreferred
shares 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
FUNDPREFERRED SHARES ("FundPreferred shares")
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 __
FundPreferred shares. Accordingly, the next succeeding Dividend Period of such
series will be a Standard Rate Period.
Dated: _________________________________ [Name of Fund]
F-1
