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Exhibit 13(b)
AUCTION AGENT AGREEMENT
between
MUNIYIELD NEW YORK INSURED FUND, INC.
and
IBJ XXXXXXXX BANK & TRUST COMPANY
Dated as of April 10, 1992
Relating to
Auction Market Preferred Stock(R)
("AMPS"(R))
Series A and Series B
of
MUNIYIELD NEW YORK INSURED FUND, INC.
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THIS AUCTION AGENT AGREEMENT dated as of April 10, 1992, between MUNIYIELD
NEW YORK INSURED FUND, INC., a Maryland corporation (the "Company"), and IBJ
XXXXXXXX BANK & TRUST COMPANY, a New York banking corporation.
The Company proposes to duly authorize and issue 850 shares of Auction
Market Preferred Stock(R), Series A ("Series A AMPS") and 850 shares of Auction
Market Preferred Stock, Series B ("Series B AMPS") (both with a par value of
$.10 per share and a liquidation preference of $50,000 per share plus an amount
equal to accumulated but unpaid dividends (whether or not earned or declared)
pursuant to the Company's Articles Supplementary (as defined below). The Series
A AMPS and Series B AMPS are sometimes referred to together herein as "AMPS". A
separate Auction (as defined below) will be conducted for each series of AMPS.
The Company desires that IBJ Xxxxxxxx Bank & Trust Company perform certain
duties as agent in connection with each Auction of shares of AMPS (the "Auction
Agent") and as the transfer agent, registrar, dividend disbursing agent and
redemption agent with respect to the shares of AMPS (the "Paying Agent") upon
the terms and conditions of this Agreement, and hereby appoints IBJ Xxxxxxxx
Bank & Trust Company as said Auction Agent and Paying Agent in accordance with
those terms and conditions (hereinafter generally referred to as the "Auction
Agent" except in Sections 3 and 4 below).
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the Company and the Auction Agent agree as follows:
1. Definitions and Rules of Construction.
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1.1 Terms Defined by Reference to
Articles Supplementary.
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Capitalized terms not defined herein shall have the respective meanings
specified in the Articles Supplementary.
1.2 Terms Defined Herein.
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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) "Affiliate" shall mean any Person, other xxxx Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated, made known to the Auction Agent to be
controlled by, in control of or under common control with, the Company, or
its successors.
(b) "Agent Member" of any Person shall mean such Person's agent member
of the Securities Depository who is identified as such in such Person's
Purchaser's Letter.
(c) "Articles Supplementary" shall mean the Articles Supplementary of
the Company, establishing the powers, preferences and rights of the AMPS,
filed on April 7,
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(R) Registered trademark of Xxxxxxx Xxxxx & Co., Inc.
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1992, in the office of the State Department of Assessments and Taxation of
the State of Maryland.
(d) "Auction" shall have the meaning specified in Section 2.1 hereof.
(e) "Auction Procedures" shall mean the Auction Procedures that are
set forth in Paragraph 11 of the Articles Supplementary.
(f) "Authorized Officer" shall mean each Senior Vice President, Vice
President, Assistant Vice President, Trust Officer, and 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 hereof in a
communication to the Company.
(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) "Company Officer" shall mean the Chairman and Chief Executive
officer, 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 Company and every other officer or employee of the Company
designated as a "Company Officer" for purposes hereof in a notice from the
Company to the Auction Agent.
(i) "Holder" shall be a holder of record of one or more shares of
AMPS, listed as such in the stock register maintained by the Paying Agent
pursuant to Section 4.6.
(j) "Purchaser's Letter" shall mean a letter addressed to the Company,
the Auction Agent and a Broker-Dealer, substantially in the form attached
to the Broker-Dealer Agreement as Exhibit A.
(k) "Settlement Procedures" shall mean the Settlement Procedures
attached to the Broker-Dealer Agreement as Exhibit B.
1.3 Rules of Construction.
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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.
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(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. The Auction.
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2.1 Purpose; Incorporation by Reference of Auction
Procedures and Settlement Procedures.
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(a) The Articles Supplementary provide that the Applicable Rate on
shares of Series A AMPS or Series B AMPS, as the case may be, for each
Dividend Period therefor after the Initial Dividend Period 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. 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. The Auction Agent hereby accepts
such appointment and agrees that, on each Auction Date, it shall follow the
procedures set forth in this Section 2 and the Auction Procedures 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 hereof to the same extent as if
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such provisions were fully set forth herein.
2.2 Preparation for Each Auction; Maintenance
of Registry of Beneficial Owners.
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(a) Pursuant to Section 2.5 hereof, the Company shall not designate
any Person to act as a Broker-Dealer without prior written approval of the
Auction Agent (which approval shall not be withheld unreasonably). At the
time of closing of the initial issuance and sale of the AMPS (the
"Closing"), the Company shall provide the Auction Agent with a list of the
Broker-Dealers previously approved by the Auction Agent and shall cause to
be delivered to the Auction Agent for execution by the Auction Agent a
Broker-Dealer Agreement signed by each such Broker-Dealer. The Auction
Agent shall keep such list current and accurate, and shall indicate
thereon, or on a separate list, the identity of each Existing Holder, if
any, whose most recent Order was submitted by a Broker-Dealer on such list
and resulted in such Existing Holder continuing to hold or purchasing
shares of AMPS. Not later than five days prior to any Auction Date for
which any change in such list of Broker-Dealers is to be effective, the
Company shall notify the Auction Agent in writing of such change and, if
any such change is the addition of a Broker-Dealer to such list, the
Company shall cause to be delivered to the Auction Agent for execution by
the Auction Agent a Broker-Dealer Agreement signed by such Broker-Dealer.
The Auction Agent shall have entered into a Broker-Dealer Agreement
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with each Broker-Dealer prior to the participation of any such Broker-
Dealer in any Auction.
(b) In the event that the Auction Date for any Auction shall be
changed after the Auction Agent shall have 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 the Broker-Dealers 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) With respect to each Dividend Period that is a Special Dividend
Period, the Company may, at its sole option and to the extent permitted by
law, by telephonic and written notice (a "Request for Special Dividend
Period") to the Auction Agent and to each Broker-Dealer, request that the
next succeeding Dividend Period for a series of AMPS will be a number of
days (other than 28 in the case of Series A AMPS and other than 7 in the
case of Series B), evenly divisible by seven, and not fewer-than seven nor
more than 364 in the case of a Short Term Dividend Period or a number of
whole years not greater than five years in the case of a Long Term Dividend
Period, specified in such notice, provided that for any Auction occurring
after the initial Auction, the Company may not give a Request for Special
Dividend Period (and any such request shall be null and void) unless the
Company has received written confirmation from S&P that such action would
not impair the rating then assigned to the AMPS by S&P and unless
sufficient Clearing Bids were made in the last occurring Auction and unless
full cumulative dividends, any amounts due with respect to mandatory
redemptions and any Additional Dividends payable prior to such date have
been paid in full. Such Request for Special Dividend Period, in the case of
a Short Term Dividend Period, shall be given on or prior to the fourth day
but not more than seven days prior to an Auction Date for a series of AMPS
and, in the case of a Long Term Dividend Period, shall be given on or prior
to the 14th day but not more than 28 days prior to the Auction Date for a
series of AMPS. Upon receiving such Request for Special Dividend Period,
the Broker-Dealers shall jointly determine whether given the factors set
forth in paragraph 2(c)(iii) of the Articles Supplementary it is advisable
that the Company issue a Notice of Special Dividend Period for the AMPS as
contemplated by such Request for Special Dividend Period and the Optional
Redemption Price of the AMPS during such Special Dividend Period and the
Specific Redemption Provisions and shall give the Company and the Auction
Agent written notice (a "Response") of such determination by no later than
the third day prior to such Auction Date. If the Broker-Dealers shall not
give the Company and the Auction Agent a Response by such third day or if
the Response states that given the factors referred to above it is not
advisable that the Company give a Notice of special Dividend Period (as
defined below) for the series of AMPS, the Company may not give a Notice of
Special Dividend Period in respect of such Request for Special Dividend
Period. In the event the Response indicates that it is advisable that the
Company give a Notice of Special Dividend Period for the series of AMPS,
the Company may by no later than the second day prior to such Auction Date
give a notice (a "Notice of Special Dividend Period") to the Auction Agent,
the Securities Depository and each Broker-Dealer, which notice will specify
(i) the duration of the Special Dividend Period, (ii) the Optional
Redemption Price as specified in the related Response and (iii) the
Specific Redemption Provisions, if any, as specified in the related
Response. The Company shall not give a Notice of Special Dividend Period,
or, if such Notice of Special Dividend Period shall have already been
given, shall give telephonic and written notice (a "Notice of Revocation")
to the Auction Agent, each
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Broker-Dealer, and the Securities Depository on or prior to the Business
Day prior to the relevant Auction Date if (x) either the 1940 Act AMPS
Coverage is not satisfied or the Company shall fail to maintain S&P
Eligible Assets and Xxxxx'x Eligible Assets each with an aggregate
Discounted Value at least equal to the AMPS Basic Maintenance Amount in
each case on each of the two Valuation Dates immediately preceding the
Business, Day prior to the relevant Auction Date on an actual basis and on
a pro forma basis giving effect to the proposed Special Dividend Period
(using as a pro forma dividend rate with respect to such Special Dividend
Period the dividend rate which the Broker-Dealers shall advise the Company
is an approximately equal rate for securities similar to the AMPS with an
equal dividend period), provided that in calculating the aggregate
Discounted Value of Xxxxx'x Eligible Assets for this purpose, the Xxxxx'x
Exposure Period shall be deemed to be one week longer, (y) sufficient funds
for the payment of dividends payable on the immediately succeeding Dividend
Payment Date have not been irrevocably deposited with the Auction Agent by
the close of business on the third Business Day preceding the related
Auction Date or (z) the Broker-Dealer(s) jointly Advise the Company that
after consideration of the factors referred to above they have concluded
that it is advisable to give a Notice of Revocation. If the Company is
prohibited from giving a Notice of Special Dividend Period as a result of
the factors enumerated in clause (x), (y) or (z) of the preceding sentence
or if the Company gives a Notice of Revocation with respect to a Notice of
Special Dividend Period, the next succeeding Dividend Period will be a 28-
day Dividend Period in the case of Series A AMPS and a 7-day Dividend
Period in the case of Series B AMPS, provided that if the then-current
Dividend Period for Series A AMPS or Series B AMPS is a Special Dividend
Period of less than 28 days, the next succeeding Dividend Period will be
the same length as the current Dividend Period. In addition, in the event
sufficient Clearing Bids are not made in any Auction or an Auction is not
held for any reason, the next succeeding Dividend Period will be a 28-day
Dividend Period (in the case of Series A AMPS) or a 7-day Dividend Period
(in the case of Series B AMPS) and the Company may not again give a Notice
of Special Dividend Period (and any such attempted notice shall be null and
void) until sufficient Clearing Bids have been made in an Auction with
respect to a 28-day Dividend Period (in the case of Series A AMPS) or a 7-
day Dividend Period (in the case of Series-B AMPS).
(d) (i) Whenever the Company intends to include any net capital gains
or other taxable income in any dividend on 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 each Broker-Dealer,
who, on or prior to such Auction Date, in accordance with its Broker-Dealer
Agreement, 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.
(ii) If the Company makes-a Retroactive Taxable allocation, the
Company will, within 90 days (and generally within 60 days) after the end
of its fiscal year for which a Retroactive Taxable Allocation is made
provide notice thereof to the Auction Agent and to each holder of shares
(initially the Securities Depository) during such fiscal year at such
holder's address as the same appears or last appeared on the stock books of
the Company. The Company will, within 30 days after such notice is given to
the Auction Agent, pay to the Auction Agent (who will then distribute to
such holders of shares of AMPS), out of funds legally available therefor, a
cash amount equal to the aggregate
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Additional Dividend with respect to all Retroactive Taxable Allocations
made to such holders during the fiscal year in question.
(e) (i) On each Auction Date, the Auction Agent shall determine the
Reference Rate and the Maximum Applicable Rate. If the Reference Rate is
not quoted on an interest basis but is quoted on a discount basis, the
Auction Agent shall convert the quoted rate to an Interest Equivalent, as
set forth in paragraph 1 of the Articles Supplementary; or, if the rate
obtained by the Auction Agent is not quoted on an interest or discount
basis, the Auction Agent shall convert the quoted rate to an interest rate
after consultation with the Company as to the method of such conversion.
Not later than 9:30 A.M. on each Auction Date, the Auction Agent shall
notify the Company and the Broker-Dealers of the Reference Rate so
determined and the Maximum Applicable Rate.
(ii) Upon receipt by the Company of the written advice contemplated by
subsection (i) of the definition of "Reference Rate" in section 1(a) of the
Articles Supplementary, the Company shall as soon as practicable, and in no
event later than the day next preceding the next Auction Date, forward a
copy of such written advice to the Auction Agent.
(iii) If the Reference Rate is the applicable 11AA11 composite
commercial Paper Rate and such 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 the applicable
11AA11 Composite Commercial Paper Rate, the Auction Agent shall immediately
notify the Company so that the Company 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 Company shall promptly advise
the Auction Agent of any such selection. If the Company does not select any
such Substitute Commercial Paper Dealer or Substitute Commercial Paper
Dealers, then the rates shall be supplied by the remaining Commercial Paper
Dealer or Commercial Paper Dealers.
(iv) If, after the date of this Agreement, there is any change in the
prevailing rating of AMPS by either of the rating agencies (or substitute
or successor rating agencies) referred to in the definition of the Maximum
Applicable Rate, thereby resulting in any change in the corresponding
applicable percentage for the AMPS, as set forth in said definition (the
"Percentage"), the Company shall notify the Auction Agent in writing of
such change in the Percentage prior to 9:00 A.M. on the Auction Date for
AMPS next succeeding such change. The Percentage for the AMPS on the date
of this Agreement is as specified in paragraph 11(a)(vii) of the Articles
Supplementary. The Auction Agent shall be entitled to rely on the last
Percentage of which it has received notice from the Company (or, in the
absence of such notice, the Percentage set forth in the preceding sentence)
in determining the Maximum Applicable Rate as set forth in Section
2.2(e)(i) hereof.
(f) (i) The Auction Agent shall maintain a current registry of the
beneficial owners of the shares of each series of AMPS who shall constitute
the Existing Holders for purposes of each Auction. The Company shall use
its best efforts to provide or cause to be provided to the Auction Agent
within ten days following the date of Closing a list of the initial
Existing Holders of each series of AMPS, and the Broker-Dealer of each
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such Existing Holder through which such Existing Holder purchased such
shares. The Auction Agent may rely upon, as evidence of the identities of
the Existing Holders, such list, the results of each Auction and notices
from any Existing Holder, the Agent Member of any Existing Holder or the
Broker-Dealer of any Existing Holder with respect to such Existing Holder's
transfer of any shares of AMPS to another Person.
(ii) In the event of any partial redemption of any series of AMPS,
upon notice by the Company to the Auction Agent of such partial redemption,
the Auction Agent shall promptly request the Securities Depository to
notify the Auction Agent of the identities of the Agent Members (and the
respective numbers of shares) from the accounts of which shares have been
called for redemption and the person or department at such Agent Member to
contact regarding such redemption and, at least two Business Days prior to
the Auction preceding the date of redemption with respect to shares of the
series being partially redeemed, the Auction Agent shall request each Agent
Member so identified to disclose to the Auction Agent (upon selection by
such Agent Member of the Existing Holders whose shares are to be redeemed)
the number of shares of such series of AMPS of each such Existing Holder,
if any, to be redeemed by the Company; provided the Auction Agent has been
furnished with the name and telephone number of a person or department at
such Agent Member from which it is to request such information. If
necessary to procure such information, the Auction Agent shall deliver to
each Agent Member a facsimile copy of the Purchaser's Letter of each
Existing Holder represented by such Agent Member, which authorizes and
instructs such Agent Member to release such information to the Auction
Agent. In the absence of receiving any such information with respect to
an Existing Holder, from such Existing Holder's Agent Member or otherwise,
the Auction Agent may continue to treat such Existing Holder as the
beneficial owner of the number of shares of the series of AMPS shown in the
Auction Agent's registry of beneficial owners.
(iii) The Auction Agent shall register a transfer of the beneficial
ownership of shares of a series of AMPS from an Existing Holder to another
Person only if such transfer is made to a Person that has delivered a
signed Purchaser's Letter to the Auction Agent and only if (A) such
transfer is pursuant to an Auction or (B) if such transfer is made other
than pursuant to an Auction, the Auction Agent has been notified in writing
in a notice substantially in the form of Exhibit D to the Broker-Dealer
Agreements, by such Existing Holder, the Agent Member of such Existing
Holder, or the Broker-Dealer of such Existing Holder of such transfer. The
Auction Agent is not required to accept any notice of transfer delivered
for 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. The Auction
Agent shall rescind a transfer made on the registry of the beneficial
owners of any shares of AMPS if the Auction Agent has been notified in
writing in a notice substantially in the form of Exhibit E to the
Broker-Dealer Agreement by the Agent Member or the Broker-Dealer of any
Person that (i) purchased any shares of AMPS and the seller failed to
deliver such shares or (ii) sold any shares of AMPS and the purchaser
failed to make payment to such Person upon delivery to the purchaser of
such shares.
(g) The Auction Agent may request that the BrokerDealers, as set forth
in Section 3.2(c) of the Broker-Dealer Agreements, provide the Auction
Agent with a list of their respective customers that such Broker-Dealers
believe are Existing Holders of
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shares of AMPS. The Auction Agent shall keep confidential any such
information and shall not disclose any such information so provided to any
Person other than the relevant Broker-Dealer and 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 be unlawful.
2.3 Auction Schedule.
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The Auction Agent shall conduct Auctions in accordance with the schedule
set forth below. Such schedule may be changed 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 each Broker-Dealer. 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 the
Broker-Dealers of the Reference Rate and the
Maximum Applicable Rate as set forth in Section
2.2(e)(i) 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 Auction Agent makes determinations pursuant to
1:00 P.M. Paragraph 11(d)(i) of the Articles Supplementary.
By approximately Auction Agent advises Company of results of
3:00 P.M. 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 allocated
as provided in Paragraph 11(e) of the Articles
Supplementary.
By approximately 10:00 Auction Agent gives notice of Auction results as
A.M. set forth in Section 2.4 hereof.
on the next succeeding
Business Day
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2.4 Notice of Auction Results.
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On each Auction Date, the Auction Agent shall notify Broker-Dealers of the
results of the Auction held on such date by telephone or through the Auction
Agent's Auction Processing system as set forth in Paragraph (a) of the
Settlement Procedures.
2.5 Broker-Dealers.
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(a) Not later than 12:00 noon on each Auction Date, the Company shall
pay to the Auction Agent in New York Clearing House or similar next-day
funds an amount in cash equal to (i) in the case of any Auction Date
immediately preceding a 7-day Dividend Period, 28-day Dividend Period or
Short-Term Dividend Period, the product of (A) a fraction the numerator of
which is the 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 denominator of which is 360, times (B) 1/4 of 1%, times (C)
$50,000, times (D) the sum of the aggregate number of Outstanding shares of
AMPS for which the Auction is conducted and (ii) in the case of any Long
Term Dividend Period, the amount determined by mutual consent of the
Company and the Broker-Dealers pursuant to Section 3.5 of the Broker-Dealer
Agreements. In lieu of making such payment in New York Clearing House or
similar next-day funds, the Company may make such payment by noon on the
Business Day immediately following the Auction Date in the form of Federal
funds or similar same-day funds. The Auction Agent shall apply such moneys
as set forth in Section 3.5 of the Broker-Dealer Agreements and shall
thereafter remit to the Company any remaining funds paid to the Auction
Agent pursuant to this Section 2.5(a).
(b) The Company shall not designate any Person to act as a
Broker-Dealer without the prior written approval of the Auction Agent,
which written approval shall not be unreasonably withheld. The Company may
designate an Affiliate and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated to act as a Broker-Dealer.
(c) The Auction Agent shall terminate any Broker-Dealer Agreement as
set forth therein if so directed by the Company.
(d) Subject to Section 2.5(b) hereof, the Auction Agent shall from
time to time enter into such Broker-Dealer Agreements as the Company shall
request.
(e) The Auction Agent shall maintain a list of Broker-Dealers.
2.6 Ownership of Shares of AMPS and Submission of Bids
by Company and Affiliates.
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Neither the Company nor any Affiliate of the Company may submit any Sell
Order or Bid, directly or indirectly, in any Auction, except that an Affiliate
of the Company that is a Broker-Dealer may submit a Sell Order or Bid on behalf
of an Existing Holder or Potential Holder. The Company shall notify the Auction
Agent if the Company or, to the best of the Company's knowledge, any Affiliate
of the Company becomes an Existing Holder of any shares of AMPS. Any shares of
AMPS redeemed, purchased or otherwise acquired (i) by the Company
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shall not be reissued or (ii) by its Affiliates shall not be transferred (other
than to the Company). The Auction Agent shall have no duty or liability with
respect to enforcement of this Section 2.6.
2.7 Access to and Maintenance of Auction Records.
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The Auction Agent shall afford to the Company, its agents, independent
public accountants and counsel, access at reasonable times during normal
business hours to review and make extracts or copies (at the Company's sole cost
and expense) of all books, records, documents and other information concerning
the conduct and results of Auctions, provided that any such agent, accountant,
or counsel shall furnish the Auction Agent with a letter from the Company
requesting that the Auction Agent afford such person access. The Auction Agent
shall maintain records relating to any Auction for a period of two years after
such Auction (unless requested by the Company to maintain such records for such
longer period not in excess of four years, then for such longer period), and
such records shall, in reasonable detail, accurately and fairly reflect the
actions taken by the Auction Agent hereunder. The Company agrees to keep any
information regarding the customers of any Broker-Dealer received from the
Auction Agent in connection with this Agreement or any Auction confidential and
shall not disclose such information or permit the disclosure of such information
without the prior written consent of the applicable Broker-Dealer to anyone
except such agent, accountant or counsel engaged to audit or review the results
of Auctions as permitted by this Section 2.7. Any such agent, accountant or
counsel, before having access to such information, shall agree to keep such
information confidential and not to disclose such information or permit
disclosure of such information without the prior written consent of the
applicable Broker-Dealer.
3. The Auction Agent as Paying Agent.
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3.1 Paying Agent.
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The Board of Directors of the Company has adopted a resolution appointing
IBJ Xxxxxxxx Bank & Trust Company as transfer agent, registrar, dividend
disbursing agent and redemption agent for the Company in connection with any
shares of AMPS (the "Paying Agent"). The Paying Agent hereby accepts such
appointment and agrees to act in accordance with its standard procedures and the
provisions of the Articles Supplementary which are specified herein as Paying
Agent with respect to the shares of AMPS and as set forth in this Section 3.
3.2 The Company's Notices to Paying Agent.
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Whenever any shares of AMPS are to be redeemed, the Company shall promptly
deliver to the Paying Agent the Notice of Redemption, which will be mailed by
the Company to each Holder, at least five days prior to the date such Notice of
Redemption is required to be mailed by the Articles Supplementary. The Paying
Agent shall have no responsibility to confirm or verify the accuracy of any such
notice.
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3.3 Company to Provide Funds for Dividends,
Redemptions and Additional Dividends.
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(a) Not later than noon, on the Business Day immediately preceding
each Dividend Payment Date, the Company shall deposit with the Paying Agent
an aggregate amount of New York Clearing House or similar next-day funds
equal to the declared dividends to be paid to Holders on such Dividend
Payment Date and shall give the Paying Agent irrevocable instructions to
apply such funds to the payment of such dividends on such Dividend Payment
Date. In lieu of making such deposit in New York Clearing House or similar
next-day funds, the Company may make such deposit by noon on each Dividend
Payment Date in the form of Federal funds or similar same-day funds.
(b) If the Company shall give the Notice of Redemption then, by noon
of the Business Day immediately preceding the date fixed for redemption,
the Company shall deposit in trust with the Paying Agent an aggregate
amount of New York Clearing House or similar next-day funds sufficient
to redeem such shares of AMPS called for redemption and shall give the
Paying Agent irrevocable instructions and authority to pay the redemption
price to the Holders of shares of AMPS called for redemption upon surrender
of the certificate or certificates therefor. In lieu of making such deposit
in New York Clearing House or similar next-day funds, the Company may make
such deposit by noon on the date fixed for redemption in the form of
Federal funds or similar same-day funds.
(c) If the Company provides notice to the Auction Agent of a
Retroactive Taxable Allocation, the Company shall, within 30 days after
such notice is given and by noon of the Business Day immediately preceding
the date fixed for payment of an Additional Dividend, deposit in trust with
the Paying Agent an aggregate amount of New York Clearing House or similar
next-day funds equal to such Additional Dividend and shall give the Paying
Agent irrevocable instructions and authority to pay the Additional
Dividends to Holders (or former Holders) of AMPS entitled thereto. In lieu
of making such deposit in New York Clearing House or similar next-day
funds, the Company may make such deposit by noon on the date fixed for
payment of an Additional Dividend in the form of Federal funds or similar
same-day funds.
3.4 Disbursing Dividends, Redemption Price
and Additional Dividends.
--------------------------------------
After receipt of the New York Clearing House or similar next-day funds (or
Federal funds or similar same-day funds) and instructions from the Company
described in Sections 3.3(a), (b) and (c) above, the Paying Agent shall pay to
the Holders (or former Holders) entitled thereto (i) on each corresponding
Dividend Payment Date, dividends on the Series A AMPS or Series B AMPS, as the
case may be, (ii) on any date fixed for redemption, the redemption price of any
shares of AMPS called for redemption and (iii) on the date fixed for payment of
an Additional Dividend, such Additional Dividend. The amount of dividends for
any Dividend Period to be paid by the Paying Agent to Holders will be determined
by the Company as set forth in Paragraph 2 of the Articles Supplementary. The
redemption price to be paid by the Paying Agent to the Holders of any shares of
AMPS called for redemption will be determined as
12
set forth in Paragraph 4 of the Articles Supplementary. The amount of Additional
Dividends to be paid by the Paying Agent in the event of a Retroactive Taxable
Allocation to Holders will be determined by the Company pursuant to paragraph
2(e) of the Articles Supplementary. The Company shall notify the Paying Agent in
writing of a decision to redeem any shares of AMPS on or prior to the date
specified in Section 3.2 above, and such notice by the Company to the Paying
Agent shall contain the information required to be stated in the Notice of
Redemption required to be mailed by the Company to such Holders. The Paying
Agent shall have no duty to determine the redemption price and may rely on the
amount thereof set forth in the Notice of Redemption.
4. The Paying Agent as Transfer Agent and Registrar.
------------------------------------------------
4.1 Original Issue of Stock Certificates.
------------------------------------
On the Date of Original Issue, one certificate for each series of AMPS
shall be issued by the Company and registered in the name of Cede & Co., as
nominee of the Securities Depository, and countersigned by the Paying Agent.
4.2 Registration of Transfer or Exchange of Shares.
----------------------------------------------
Except as provided in this Section 4.2, the shares of each series of AMPS
shall be registered solely in the name of the Securities Depository or its
nominee. If the Securities Depository shall give notice of its intention to
resign as such, and if the Company shall not have selected a substitute
Securities Depository acceptable to the Paying Agent prior to such resignation,
then upon such resignation, the shares of each series of AMPS may, at the
Company's request, be registered for transfer or exchange, and new certificates
thereupon shall be issued in the name of the designated transferee or
transferees, upon surrender of the old certificate in form deemed by the Paying
Agent properly endorsed for transfer with (a) all necessary endorsers'
signatures guaranteed in such manner and form as the Paying Agent may require by
a guarantor reasonably believed by the Paying Agent to be responsible, (b) such
assurances as the Paying Agent shall deem necessary or appropriate to evidence
the genuineness and effectiveness of each necessary endorsement and (c)
satisfactory evidence of compliance with all applicable laws relating to the
collection of taxes in connection with any registration of transfer and exchange
or funds necessary for the payment of such taxes. If the certificate or
certificates for shares of AMPS are not held by the Securities Depository or its
nominee, payments upon transfer of shares in an Auction shall be made in
same-day funds to the Auction Agent against delivery of certificates therefor.
4.3 Removal of Legend.
-----------------
Any request for removal of a legend indicating a restriction on transfer
from a certificate evidencing shares of a series of AMPS shall be accompanied by
an opinion of counsel stating that such legend may be removed and such shares
transferred free of the restriction described in such legend, said opinion to be
delivered under cover of a letter from a Company Officer authorizing the Paying
Agent to remove the legend on the basis of said opinion.
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4.4 Lost Stock Certificates.
-----------------------
The Paying Agent shall issue and 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 Company
and the Paying Agent, subject at all times to provisions of law, the By-Laws of
the Company governing such matters and resolutions adopted by the Company with
respect to lost securities. The Paying Agent may issue new certificates in
exchange for and upon the cancellation of mutilated certificates. Any request
by the Company to the Paying 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 Company to the Paying Agent that such issuance will comply with such
provisions of applicable law and the By-Laws and resolutions of the Company.
4.5 Disposition of Cancelled Certificates;
Record Retention.
--------------------------------------
The Paying Agent shall retain stock certificates which have been cancelled
in transfer or in exchange and accompanying documentation in accordance with
applicable rules and regulations of the Securities and Exchange Commission for
two calendar years from the date of such cancellation. The Paying Agent shall,
upon written request from the Company, afford to the Company, its agents and
counsel access at reasonable times during normal business hours to review and
make extracts or copies (at the Company's sole cost and expense) of such
certificates and accompanying documentation. Upon request by the Company at any
time after the expiration of this two-year period, the Paying Agent shall
deliver to the Company the cancelled certificates and accompanying
documentation. The Company shall, at its expense, retain such records for a
minimum additional period of four calendar years from the date of delivery of
the records to the Company and shall make such records available during this
period at any time, or from time to time, for reasonable periodic, special, or
other examinations by representatives of the Securities and Exchange Commission.
The Company shall also undertake to furnish to the Securities and Exchange
Commission, 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 Company without the
approval of the Paying Agent, which shall not be unreasonably withheld, but will
be safely stored for possible future reference.
4.6 Stock Register.
--------------
The Paying Agent shall maintain the stock register, which shall contain a
list of the Holders, the number of shares held by each Holder and the address of
each Holder. The Paying Agent shall record in the stock register any change of
address of a Holder upon notice by such Holder. In case of any written request
or demand for the inspection of the stock register or any other books of the
Company in the possession of the Paying Agent, the Paying Agent will notify the
Company and secure instructions as to permitting or refusing such inspection.
The Paying Agent reserves the right, however, to exhibit the stock register or
other records to any person in case 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 shall have offered indemnification satisfactory to the Paying Agent.
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4.7 Return of Funds.
---------------
Any funds deposited with the Paying Agent by the Company for any reason
under this Agreement, including for the payment of dividends or the redemption
of shares of any series of AMPS, that remain with the Paying Agent after 12
months shall be repaid to the Company upon the written request of the Company.
5. Representations and Warranties.
------------------------------
(a) The Company represents and warrants to the Auction Agent that:
(i) the Company is a duly incorporated and validly existing
corporation in good standing under the laws of the State of Maryland and
has full power to execute and deliver this Agreement and to authorize,
create and issue the shares of AMPS;
(ii) the Company is registered with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended, as a
closed-end non-diversified management investment company;
(iii) this Agreement has been duly and validly authorized, executed
and delivered by the Company and constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance
with its terms, subject as to such enforceability to bankruptcy,
insolvency, reorganization and other laws of general applicability relating
to or affecting creditors' rights and to general equitable principles;
(iv) the form of certificate evidencing the shares of each series of
AMPS complies with all applicable laws of the State of Maryland;
(v) the shares of each series of AMPS have been duly and validly
authorized by the Company and, upon completion of the initial sale of the
shares of such series of AMPS and receipt of payment therefor, will be
validly issued, fully paid and nonassessable;
(vi) the offering of the shares of each series of AMPS has been
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 as required in connection with the execution and
delivery of this Agreement or the issuance of the shares of AMPS except as
required by applicable state securities or insurance laws, all of which
have been taken;
(vii) the execution and delivery of this Agreement and the issuance
and delivery of the shares of each series of AMPS 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 Charter or the By-Laws of
the Company, any law or regulation applicable to the Company, any order or
decree of any court or public authority having jurisdiction over the
Company, or any mortgage, indenture, contract, agreement or undertaking to
which the Company is a party or by which it is bound; and
15
(viii) no taxes are payable upon or in respect of the execution of
this Agreement or the issuance of the shares of each series of AMPS.
(b) The Auction Agent represents and warrants to the Company that the
Auction Agent is duly organized and is validly existing as a banking
corporation in good standing under the laws of the State of New York and
has the corporate power to enter into and perform its obligations under
this Agreement.
6. The Auction Agent.
-----------------
6.1 Duties and Responsibilities.
---------------------------
(a) The Auction Agent is acting solely as agent for the Company
hereunder and owes no fiduciary duties to any Person except as provided by
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.
6.2 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 hereby and upon
any written instruction, notice, request, direction, consent, report,
certificate, share certificate or other instrument, paper or document
reasonably believed 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 Company
or by a Broker-Dealer. The Auction Agent may record telephone
communications with the Company or with the Broker-Dealers or both.
(b) The Auction Agent may consult with counsel of its choice, and the
written 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. The Auction Agent shall be
under no liability for interest on any money received by it hereunder
except as otherwise agreed in writing with the Company.
(d) The Auction Agent may perform its duties and exercise its rights
hereunder either directly or by or through agents or attorneys.
16
6.3 Auction Agent's Disclaimer.
--------------------------
The Auction Agent makes no representation as to the validity or adequacy of
this Agreement, the Broker-Dealer Agreements or the AMPS.
6.4 Compensation. Expenses and Indemnification.
------------------------------------------
(a) The Company shall pay the Auction Agent from time to time
reasonable compensation for all services rendered by it under this
Agreement and the Broker-Dealer Agreements.
(b) The Company shall reimburse the Auction Agent upon its request for
all reasonable 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, expenses
and disbursements of its agents and counsel), except any expense,
disbursement and advances attributable to its negligence or bad faith.
(c) The Company shall indemnify the Auction Agent for, and hold it
harmless against, any loss, liability or expense incurred without
negligence or bad faith 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 any of its duties
hereunder and thereunder, except such as may result from its negligence or
bad faith.
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 Company may terminate this
Agreement at any time by so notifying the Auction Agent, provided that if
any AMPS remain outstanding the Company 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 prior notice to the
Company on the date specified in such notice, which shall be no earlier
than 60 days after delivery of such notice. If the Auction Agent resigns
while any shares of AMPS remain outstanding, the Company shall use its best
efforts to enter into an agreement with a successor auction agent
containing substantially the same terms and conditions as this Agreement.
(b) Except as otherwise provided in this Section 7.1(b), the
respective rights and duties of the Company and the Auction Agent under
this Agreement shall cease upon termination of this Agreement. The
Company's representations, warranties, covenants and obligations to the
Auction Agent under Sections 5 and 6.4 hereof shall survive the termination
hereof. Upon termination of this Agreement, the Auction Agent shall (i)
resign as Auction Agent under the Broker-Dealer Agreements, (ii) at the
Company's request, promptly deliver to the Company copies of all books and
records maintained by it in connection with its duties hereunder, and (iii)
at the request of the Company, promptly
17
transfer to the Company or any successor auction agent any funds deposited
by the Company with the Auction Agent (whether in its capacity as Auction
Agent or Paying Agent) pursuant to this Agreement which have not previously
been distributed by the Auction Agent in accordance with this Agreement.
7.2 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 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 the Company, MuniYield New York Insured Fund, Inc.
addressed: 000 Xxxxxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Treasurer
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
If to the Auction IBJ Xxxxxxxx Bank & Trust Company
Agent, addressed: Xxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Auction Window
Subcellar 1
Telephone No.: (000) 000-0000
Telecopier 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 the Company by a Company Officer and
on behalf of the Auction Agent by an Authorized Officer.
7.3 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 except for agreements
relating to the compensation of the Auction Agent.
7.4 Benefits.
--------
Nothing herein, express or implied, shall give to any Person, other than
the Company, the Auction Agent and their respective successors and assigns, any
benefit of any legal or equitable right, remedy or claim hereunder.
18
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. The Company shall notify the Auction Agent of any change in
the Articles Supplementary prior to the effective date of any such change.
(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 right or remedy with respect to any
subsequent breach.
7.6 Successor 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 the
Company and the Auction Agent. This Agreement may not be assigned by either
party hereto absent the prior written consent of the other party, which consent
shall not be unreasonably withheld.
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 applicable to agreements made and to be performed
in said state.
19
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.
MUNIYIELD NEW YORK INSURED FUND, INC.
By: __________________________________________
Title:
IBJ XXXXXXXX BANK & TRUST COMPANY
By: __________________________________________
Title:
20
