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EXHIBIT 13(c)
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BROKER-DEALER AGREEMENT
BETWEEN
IBJ XXXXXXXX BANK & TRUST COMPANY
AND
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DATED AS OF JULY 1, 1992
RELATING TO
AUCTION MARKET PREFERRED STOCK(R)
("AMPS"(R))
OF
MUNIYIELD NEW JERSEY FUND, INC.
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(R)Registered trademark of Xxxxxxx Xxxxx & Co., Inc.
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BROKER-DEALER AGREEMENT dated as of July 1, 1992 between IBJ Xxxxxxxx Bank
& Trust Company, a New York banking corporation (the "Auction Agent"), not in
its individual capacity but solely as agent of MuniYield New Jersey Fund, Inc.,
a Maryland corporation (the "Company"), pursuant to authority granted to it in
the Auction Agent Agreement dated as of July 1, 1992, between the Company and
the Auction Agent (the "Auction Agent Agreement") and
__________________________________________(together with its successors and
assigns hereinafter referred to as "BD").
The Company has duly authorized and issued 1,200 shares of Auction Market
Preferred Stock(R), with a par value of $.10 per share and a liquidation
preference of $50,000 per share plus accumulated but unpaid dividends (whether
or not earned or declared), (the "AMPS") pursuant to the Company's Articles
Supplementary (as defined below).
The Company's Articles Supplementary provide that the dividend rate on the
AMPS for each Dividend Period therefor after the Initial Dividend Period shall
be the Applicable Rate therefor, which in each case, in general, shall be the
rate per annum that a commercial bank, trust company or other financial
institution appointed by the Company advises results from implementation of the
Auction Procedures (as defined below). The Board of Directors of the Company
has adopted a resolution appointing IBJ Xxxxxxxx Bank & Trust Company as
Auction Agent for purposes of the Auction Procedures, and pursuant to Section
2.5(d) of the Auction Agent Agreement, the Company has requested and directed
the Auction Agent to execute and deliver this Agreement.
The Auction Procedures require the participation of one or more
Broker-Dealers.
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(R)Registered trademark of Xxxxxxx Xxxxx & Co., Inc.
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NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the Auction Agent and BD agree as follows:
1. Definitions and Rules of Construction.
1.1 Terms Defined by Reference to the Articles Supplementary.
Capitalized terms not defined herein shall have the respective meanings
specified in the Articles Supplementary of the Company.
1.2 Terms Defined Herein. As used herein and in the Settlement
Procedures (as defined below), the following terms shall have the following
meanings, unless the context otherwise requires:
(a) "Articles Supplementary" shall mean the Articles Supplementary,
as amended, of the Company, establishing the powers, preferences and rights of
the AMPS filed on June 25, 1992 in the office of the State Department of
Assessments and Taxation of the State of Maryland.
(b) "Auction" shall have the meaning specified in Section 2.1 hereof.
(c) "Auction Procedures" shall mean the Auction Procedures that are
set forth in Paragraph 11 of the Articles Supplementary.
(d) "Authorized Officer" shall mean each Senior Vice President, Vice
President, Assistant Vice President, Trust Officer, Assistant Secretary and
Assistant Treasurer of the Auction Agent assigned to its Corporate Trust and
Agency Group and every other officer or employee of the Auction Agent
designated as an "Authorized Officer" for purposes of this Agreement in a
communication to BD.
(e) "BD Officer" shall mean each officer or employee of BD designated
as a "BD Officer" for purposes of this Agreement in a communication to the
Auction Agent.
(f) "Broker-Dealer Agreement" shall mean this Agreement and any
substantially similar agreement between the Auction Agent and a Broker-Dealer.
(g) "Purchaser's Letter" shall mean a letter addressed to the
Company, the Auction Agent and a Broker-Dealer, substantially in the form
attached hereto as Exhibit A.
(h) "Settlement Procedures" shall mean the Settlement Procedures
attached hereto as Exhibit B.
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.
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(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.
2. Notification of Dividend Period and Advance Notice of Allocation
of Taxable Income.
(a) The provisions contained in paragraph 2 of the Articles
Supplementary concerning the notification of a Special Dividend Period will be
followed by the Auction Agent and BD and the provisions contained therein are
incorporated herein by reference in their entirety and shall be deemed to be a
part of this Agreement to the same extent as if such provisions were fully set
forth herein.
(b) Except as otherwise provided in paragraph 2(f) of the Articles
Supplementary, whenever the Company intends to include any net capital gains or
other taxable income in any dividend on the shares of AMPS, the Company will
notify the Auction Agent of the amount to be so included at least five Business
Days prior to the Auction Date on which the Applicable Rate for such dividend
is to be established. Whenever the Auction Agent receives such notice from the
Company, it will in turn notify BD, who, on or prior to such Auction Date, will
notify its Existing Holders and Potential Holders believed to be interested in
submitting an Order in the Auction to be held on such Auction Date.
3. The Auction.
3.1 Purpose; Incorporation by Reference of Auction Procedures and
Settlement Procedures.
(a) On each Auction Date, the provisions of the Auction Procedures
will be followed by the Auction Agent for the purpose of determining the
Applicable Rate for the AMPS, for the next Dividend Period therefor. Each
periodic operation of such procedures is hereinafter referred to as an
"Auction."
(b) All of the provisions contained in the Auction Procedures and the
Settlement Procedures are incorporated herein by reference in their entirety
and shall be deemed to be a part of this Agreement to the same extent as if
such provisions were fully set forth herein.
(c) BD is delivering herewith a Purchaser's Letter executed by BD
and, in the case of Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, a list
of persons to whom BD will initially sell the shares of AMPS, the number of
shares of AMPS BD will sell to each such person and the number of shares of
AMPS BD will hold for its own account. BD agrees to act as, and assumes the
obligations of and limitations and restrictions placed upon, a Broker-Dealer
under this Agreement. BD understands that other Persons meeting the
requirements specified in the definition of "Broker-Dealer" contained in
paragraph 1 of the Articles Supplementary may
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execute a Broker-Dealer Agreement and a Purchaser's Letter and participate as
Broker-Dealers in Auctions.
(d) BD and other Broker-Dealers may participate in Auctions for their
own accounts, provided that BD or such other Broker-Dealers, as the case may
be, has executed a Purchaser's Letter. However, the Company may by notice to BD
and all other Broker-Dealers prohibit all Broker-Dealers from submitting Bids
in Auctions for their own accounts, provided that Broker-Dealers may continue
to submit Hold Orders and Sell Orders.
3.2 Preparation for Each Auction.
(a) Not later than 9:30 A.M. on each Auction Date for the AMPS, the
Auction Agent shall advise BD by telephone of the Reference Rate and the
Maximum Applicable Rate in effect on such Auction Date.
(b) In the event that the Auction Date for any Auction shall be
changed after the Auction Agent has given the notice referred to in clause
(vii) of paragraph (a) of the Settlement Procedures, the Auction Agent, by such
means as the Auction Agent deems practicable, shall give notice of such change
to BD not later than the earlier of 9:15 A.M. on the new Auction Date or later
than 9:15 A.M. on the old Auction Date. Thereafter, BD shall promptly notify
customers of BD that BD believes are Existing Holders of shares of AMPS of such
change in the Auction Date.
(c) The Auction Agent from time to time may request BD to provide it
with a list of the respective customers BD believes are Existing Holders of
shares of AMPS. BD shall comply with any such request, and the Auction Agent
shall keep confidential any such information, including information received as
to the identity of Bidders in any Auction, and shall not disclose any such
information so provided to any Person other than the Company; provided that the
Auction Agent reserves the right to disclose any such information if it is
advised by its counsel that its failure to do so would (i) be unlawful or (ii)
expose it to liability unless the Company or BD shall have offered
indemnification satisfactory to the Auction Agent; and such information shall
not be used by the Auction Agent or its officers, employees, agents or
representatives for any purpose other than such purposes as are described
herein. The Auction Agent shall transmit any list of customers BD believes are
Existing Holders of shares of AMPS and information related thereto only to its
officers, employees, agents or representatives in the Corporate Trust and
Agency Group who need to know such information for the purposes of acting in
accordance with this Agreement and shall prevent the transmission of such
information to others and shall cause its officers, employees, agents and
representatives to abide by the foregoing confidentiality restrictions;
provided, however, that the Auction Agent shall have no responsibility or
liability for the actions of any of its officers, employees, agents or
representatives after they have left the employ of the Auction Agent.
(d) The Auction Agent is not required to accept the Purchaser's
Letter for any Potential Holder for an Auction unless it is received by the
Auction Agent by 3:00 P.M. on the Business Day next preceding such Auction.
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3.3 Auction Schedule; Method of Submission of Orders.
(a) The Company and the Auction Agent shall conduct Auctions for the
AMPS in accordance with the schedule set forth below. Such schedule may be
changed at any time by the Auction Agent with the consent of the Company, which
consent shall not be unreasonably withheld. The Auction Agent shall give notice
of any such change to BD. Such notice shall be received prior to the first
Auction Date on which any such change shall be effective.
Time Event
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By 9:30 A.M. Auction Agent advises the Company and
Broker-Dealers of Reference Rate
and the Maximum Applicable Rate as set
forth in Section 3.2(a)
hereof.
9:30 A.M.-1:00 P.M. Auction Agent assembles information
communicated to it by Broker-Dealers
as provided in Paragraph 11(c)(i) of
the Articles Supplementary. Submission
Deadline is 1:00 P.M.
Not earlier than 1:00 P.M. Auction Agent makes determinations
pursuant to Paragraph 11(d)(i) of
the Articles Supplementary.
By approximately 3:00 P.M. Auction Agent advises Company
of results of Auction as
provided in Paragraph 11(d)(ii)
of the Articles Supplementary.
Submitted Bids and Submitted Sell
Orders are accepted and rejected in
whole or in part and shares of AMPS
are allocated as provided in
Paragraph 11(e) of the Articles
Supplementary.
By approximately 10:00 A.M. on the next Auction Agent gives notice of Auction
succeeding Business Day results as set forth in Section
3.4(a) hereof.
(b) BD agrees to maintain a list of Potential Holders and to contact
the Potential Holders on such list on or prior to each Auction Date for the
purposes set forth in Paragraph 11 of the Articles Supplementary.
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(c) BD agrees not to sell, assign or dispose of any shares of AMPS to
any Person who has not delivered a signed Purchaser's Letter to the Auction
Agent.
(d) BD shall submit orders to the Auction Agent in writing in
substantially the form attached hereto as Exhibit C. BD shall submit separate
Orders to the Auction Agent for each Potential Holder or Existing Holder on
whose behalf BD is submitting an Order and shall not net or aggregate the
Orders of Potential Holders or Existing Holders on whose behalf BD is
submitting Orders.
(e) BD shall deliver to the Auction Agent (i) a written notice,
substantially in the form attached hereto as Exhibit D, of transfers of shares
of AMPS, made through BD by an Existing Holder to another Person other than
pursuant to an Auction, and (ii) a written notice, substantially in the form
attached hereto as Exhibit E, of the failure of shares of AMPS to be
transferred to or by any Person that purchased or sold shares of or through BD
pursuant to an Auction. The Auction Agent is not required to accept any notice
delivered pursuant to the terms of the foregoing sentence with respect to an
Auction unless it is received by the Auction Agent by 3:00 P.M. on the Business
Day next preceding the applicable Auction Date.
3.4 Notice of Auction Results.
(a) On each Auction Date, the Auction Agent shall notify BD by
telephone as set forth in paragraph (a) of the Settlement Procedures. On the
Business Day next succeeding such Auction Date, the Auction Agent shall notify
BD in writing of the disposition of all Orders submitted by BD in the Auction
held on such Auction Date.
(b) BD shall notify each Existing Holder or Potential Holder on whose
behalf BD has submitted an Order as set forth in paragraph (b) of the
Settlement Procedures and take such other action as is required of BD pursuant
to the Settlement Procedures.
If any Existing Holder selling shares of AMPS in an Auction fails to
deliver such shares, the BD of any Person that was to have purchased shares of
such AMPS in such Auction may deliver to such Person a number of whole shares of
AMPS that is less than the number of shares that otherwise was to be purchased
by such Person. In such event, the number of shares of AMPS to be so delivered
shall be determined by such BD. Delivery of such lesser number of shares shall
constitute good delivery. Upon the occurrence of any such failure to deliver
shares, such BD shall deliver to the Auction Agent the notice required by
Section 3.3(e)(ii) hereof. Notwithstanding the foregoing terms of this Section
3.4(b), any delivery or non-delivery of shares of AMPS which represents any
departure from the results of an Auction, as determined by the Auction Agent,
shall be of no effect unless and until the Auction Agent shall have been
notified of such delivery or non-delivery in accordance with the terms of
Section 3.3(e) hereof. The Auction Agent shall have no duty or liability with
respect to enforcement of this Section 3.4(b).
3.5 Service Charge to Be Paid to BD. On the Business Day next
succeeding each Auction Date, the Auction Agent shall pay to BD from moneys
received from the Company an amount equal to: (a) in the case of any Auction
Date immediately preceding a 7-day Dividend Period or Short Term Dividend
Period, the product of (i) a fraction the numerator of which is the
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number of days in such Dividend Period (calculated by counting the first day of
such Dividend Period but excluding the last day thereof) and the dominator of
which is 360, times (ii) 1/4 of 1%, times (iii) $50,000, times (iv) the sum
of (A) the aggregate number of AMPS placed by BD in the applicable Auction that
were (x) the subject of a Submitted Bid of an Existing Holder submitted by BD
and continued to be held as a result of such submission and (y) the subject of
a Submitted Bid of a Potential Holder submitted by BD and were purchased as a
result of such submission plus (B) the aggregate number of AMPS subject to
valid Hold Orders (determined in accordance with Paragraph 11 of the Articles
Supplementary) submitted to the Auction Agent by BD plus (C) the number of AMPS
deemed to be subject to Hold Orders by Existing Holders pursuant to Paragraph
11 of the Articles Supplementary that were acquired by such Existing Holders
through BD and (b) in the case of any Auction Date immediately preceding a Long
Term Dividend Period, that amount as mutually agreed upon by the Company and
BD, based on the selling concession that would be applicable to an underwriting
of fixed or variable rate preferred shares with a similar final maturity or
variable rate dividend period, at the commencement of such Long Term Dividend
Period.
For purposes of subclause (a)(iv)(C) of the foregoing sentence, if any
Existing Holder who acquired shares of AMPS through BD transfers those shares
to another Person other than pursuant to an Auction, then the Broker-Dealer for
the shares so transferred shall continue to be BD, provided, however, that if
the transfer was effected by, or if the transferee is, a Broker-Dealer other
than BD, then such Broker-Dealer shall be the Broker-Dealer for such shares.
4. The Auction Agent.
4.1 Duties and Responsibilities.
(a) The Auction Agent is acting solely as agent for the Company
hereunder and owes no fiduciary duties 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 no implied
covenants or obligations shall be read into this Agreement against the Auction
Agent.
(c) In the absence of bad faith or negligence on its part, the
Auction Agent shall not be liable for any action taken, suffered, or omitted or
for any error of judgment made by it in the performance of its duties under
this Agreement. The Auction Agent shall not be liable for any error of judgment
made in good faith unless the Auction Agent shall have been negligent in
ascertaining (or failing to ascertain) the pertinent facts.
4.2 Rights of the Auction Agent.
(a) The Auction Agent may rely and shall be protected in acting or
refraining from acting upon any communication authorized by this Agreement and
upon any written instruction, notice, request, direction, consent, report,
certificate, share certificate or other instrument, paper or document believed
by it to be genuine. The Auction Agent shall not be liable for acting upon any
telephone communication authorized by this Agreement which the Auction Agent
believes in good faith to have been given by the Company or by a Broker-Dealer.
The Auction Agent may record telephone communications with the Broker-Dealers.
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(b) The Auction Agent may consult with counsel of its own choice, and
the advice of such counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon.
(c) The Auction Agent shall not be required to advance, expend or
risk its own funds or otherwise incur or become exposed to financial liability
in the performance of its duties hereunder.
(d) The Auction Agent may perform its duties and exercise its rights
hereunder either directly or by or through agents or attorneys.
4.3 Auction Agent's Disclaimer. The Auction Agent makes no
representation as to the validity or adequacy of this Agreement or the AMPS.
5. Miscellaneous.
5.1 Termination. Any party may terminate this Agreement at any time
upon five days' prior notice to the other party; provided, however, that if BD
is Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, neither BD nor the
Auction Agent may terminate this Agreement without first obtaining prior
written consent of the Company of such termination, which consent shall not be
unreasonably withheld.
5.2 Participant in Securities Depository; Payment of Dividends in
Same-Day Funds.
(a) BD is, and shall remain for the term of this Agreement, a member
of, or participant in, the Securities Depository (or an affiliate of such a
member or participant).
(b) BD represents that it (or if such BD does not act as Agent
Member, one of its affiliates) shall make all dividend payments on the AMPS
available in same-day funds on each Dividend Payment Date to customers that use
such BD or affiliate as Agent Member.
5.3 Agent Member. At the date hereof, BD is a participant of the
Securities Depository.
5.4 Communications. Except for (i) communications authorized to be
made by telephone pursuant to this Agreement or the Auction Procedures and (ii)
communications in connection with the Auctions (other than those expressly
required to be in writing), all notices, requests and other communications to
any party hereunder shall be in writing (including telecopy or similar writing)
and shall be given to such party, addressed to it, at its address or telecopy
number set forth below:
If to BD
addressed:
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If to the Auction IBJ Xxxxxxxx Bank & Trust Company
Agent, addressed: Xxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Auction Window
Subcellar 1
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
or such other address or telecopy number as such party may hereafter specify
for such purpose by notice to the other party. Each such notice, request or
communication shall be effective when delivered at the address specified
herein. Communications shall be given on behalf of BD by a BD Officer and on
behalf of the Auction Agent by an Authorized Officer. BD may record telephone
communications with the Auction Agent.
5.5 Entire Agreement. This Agreement contains the entire agreement
between the parties relating to the subject matter hereof, and there are no
other representations, endorsements, promises, agreements or understandings,
oral, written or inferred, between the parties relating to the subject matter
hereof.
5.6 Benefits. Nothing in this Agreement, express or implied, shall
give to any person, other than the Company, the Auction Agent and BD and their
respective successors and assigns, any benefit of any legal or equitable right,
remedy or claim, under this Agreement.
5.7 Amendment; Waiver.
(a) This Agreement shall not be deemed or construed to be modified,
amended, rescinded, cancelled or waived, in whole or in part, except by a
written instrument signed by a duly authorized representative of the party to
be charged.
(b) Failure of either party to this Agreement to exercise any right
or remedy hereunder in the event of a breach of this Agreement by the other
party shall not constitute a waiver of any such right or remedy with respect to
any subsequent breach.
5.8 Successors and Assigns. This Agreement shall be binding upon,
inure to the benefit of, and be enforceable by, the respective successors and
permitted assigns of each of BD and the Auction Agent. This Agreement may not
be assigned by either party hereto absent the prior written consent of the
other party; provided, however, that this Agreement may be assigned by the
Auction Agent to a successor Auction Agent selected by the Company without the
consent of BD.
5.9 Severability. If any clause, provision or section of this
Agreement shall be ruled invalid or unenforceable by any court of competent
jurisdiction, the invalidity or unenforceability of such clause, provision or
section shall not affect any remaining clause, provision or section hereof.
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5.10 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.
6. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York applicable to agreements
made and to be performed in said State.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the date first above written.
IBJ XXXXXXXX BANK & TRUST
COMPANY
By:
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By:
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