EXHIBIT 13(b)
AUCTION AGENCY AGREEMENT
between
VAN XXXXXX XXXXXXX TRUST FOR INVESTMENT GRADE MUNICIPALS
and
BANKERS TRUST COMPANY
Dated as of March ___, 1992
Relating to
Auction Preferred Shares, Series X, X, X xxx X
xx
XXX XXXXXX XXXXXXX TRUST FOR INVESTMENT GRADE MUNICIPALS
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TABLE OF CONTENTS
PAGE
SECTION I DEFINITIONS AND RULES OF CONSTRUCTION . . . . . . . . . . . . . . . . . . . 1
1.1 Terms Defined by Reference to
APS Provisions . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Terse Defined Herein . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Rules of Construction . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 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 . . . . . . . . . . . . . . . . 4
2.3 Information Concerning Rates . . . . . . . . . . . . . . . . . . . . 7
2.4 Auction Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.5 Designation of Special Dividend
Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.6 Allocation of Taxable Income . . . . . . . . . . . . . . . . . . . . 14
2.7 Failure to Deposit . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.8 Broker-Dealers . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.9 Ownership of Shares of APS . . . . . . . . . . . . . . . . . . . . . 18
2.10 Access to and Maintenance of
Auction Records . . . . . . . . . . . . . . . . . . . . . . . . 18
2.11 Dividend and Redemption Price
Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 3 THE AUCTION AGENT AS DIVIDEND
AND REDEMPTION PRICE DISBURSING AGENT . . . . . . . . . . . . . . . . 19
SECTION 4 THE AUCTION AGENT AS TRANSFER AGENT
AND REGISTRAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.1 Issue of Share Certificates. . . . . . . . . . . . . . . . . . . . . 20
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4.2 Registration of Transfer of Shares . . . . . . . . . . . . . . . . . 20
4.3 Removal of Legend on Restricted Shares . . . . . . . . . . . . . . . 20
4.4 Lost Share Certificates. . . . . . . . . . . . . . . . . . . . . . . 20
4.5 Disposition of Cancelled
Certificates; Record Retention . . . . . . . . . . . . . . . . . 20
4.6 Share Transfer Books . . . . . . . . . . . . . . . . . . . . . . . . 21
4.7 Return of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 5 REPRESENTATIONS AND WARRANTIES OF THE FUND . . . . . . . . . . . . . . . . 21
SECTION 6 THE AUCTION AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.1 Duties and Responsibilities . . . . . . . . . . . . . . . . . . . . 23
6.2 Rights of the Auction Agent . . . . . . . . . . . . . . . . . . . . 23
6.3 Auction Agent's Disclaimer . . . . . . . . . . . . . . . . . . . . . 24
6.4 Compensation, Expenses and
Indemnification . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 7 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.1 Term Of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.2 Communications . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.3 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.4 Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.5 Amendment; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.6 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . 27
7.7 Limitation of Liability. . . . . . . . . . . . . . . . . . . . . . . 27
7.8 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.9 Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . 27
7.10 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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EXHIBITS
EXHIBIT A - Form of Broker-Dealer Agreement
EXHIBIT B - Form of Master Purchaser's Letter
EXHIBIT C - Settlement Procedures
EXHIBIT D - Form of APS Provisions
EXHIBIT E - Form of Notice of Auction Dates
EXHIBIT F - Form of Notice of Proposed Change of Length of Rate Period
EXHIBIT G - Form of Notice of Change of Length of Rate Period
EXHIBIT H - Form of Notice of Determination Not to Change Length of Rate Period
EXHIBIT I - Form of Notice of Cure of Failure to Deposit
EXHIBIT J - Form of Notice of Subsequent Cure of Failure to Deposit
EXHIBIT K - Form of Notice of Capital Gain and Taxable Ordinary Income Dividend
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AUCTION AGENCY AGREEMENT dated as of March __, 1992 between VAN XXXXXX
XXXXXXX TRUST FOR INVESTMENT GRADE MUNICIPALS, a Massachusetts business trust
(the "Fund"), and Bankers Trust Company, a New York banking corporation (the
"Auction Agent").
WHEREAS, the Fund proposes to issue four series of preferred shares of
beneficial interest, par value $.01 per share, liquidation preference $50,000
per share, designated Auction Preferred Shares (the "APS") pursuant to the APS
Provisions (as hereinafter defined) and desires that the Auction Agent perform
certain duties in connection with the APS upon the terms and subject to the
conditions of this Agreement, and hereby appoints the Auction Agent to act in
the capacities set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the Fund and the Auction Agent agree as follows:
1. Definitions and Rules of Construction.
1.1 Terms Defined by Reference to APS Provisions. Capitalized terms
not defined herein shall have the respective meanings specified in the APS
Provisions.
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) "Agent Member" of any Person shall mean the member of, or
participant in, the Securities Depository that will act on behalf of a Bidder
and is identified as such in such Bidder's Master Purchaser's Letter.
(b) "APS Provisions" shall mean the Certificate of Vote of
the Fund's Board of Trustees establishing the series of shares of APS pursuant
to the Declaration of Trust of the Fund and attached hereto as Exhibit D.
(c) "Auction" shall have the meaning specified in Section 2.1
hereof.
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(d) "Auction Procedures" shall mean the auction procedures
constituting Part II of the form of APS Provisions.
(e) "Authorized Officer" shall mean each Senior vice
President, Vice President, Assistant Vice President, Assistant Treasurer and
Assistant Secretary of the Auction Agent and every other officer or employee of
the Auction Agent designated as an "Authorized Officer" for purposes hereof in a
communication to the Fund.
(f) "Broker-Dealer" shall mean any broker-dealer, commercial
bank or other entity permitted by law to perform the functions of a
Broker-Dealer that is a member of, or a participant in, the Securities
Depository or is an affiliate of such member or participant, has been selected
by the Fund and has entered into a Broker-Dealer Agreement that remains
effective.
(g) "Broker-Dealer Agreement" shall mean each agreement among
the Fund, the Auction Agent and a Broker-Dealer substantially in the form
attached hereto as Exhibit A.
(h) "Existing Holder," when used with respect to shares of
any series of APS, shall mean a Person who has signed a Master Purchaser's
Letter and is listed as the beneficial owner of such shares of APS in the
records of the Auction Agent.
(i) "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.
(j) "Master Purchaser's Letter" shall mean a letter addressed
to the Fund, the Auction Agent, a Broker-Dealer and an Agent Member,
substantially in the form attached hereto as Exhibit B.
(k) "Potential Holder," when used with respect to shares of
any series of APS, shall mean any Person, including any Existing Holder of
shares of such
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series of APS, (i) who shall have executed a Master Purchaser's Letter and (ii)
who may be interested in acquiring shares of such series of APS (or, in the case
of an Existing Holder of shares of such series of APS, additional shares of such
series of APS).
(l) "Settlement Procedures" shall mean the Settlement
Procedures attached hereto as Exhibit C.
(m) "Underwriters" shall mean Xxxxxxx, Sachs & Co., Xxxxx
Xxxxxx, Xxxxxx Xxxxx & Co. Incorporated, PaineWebber Incorporated, Prudential
Securities Incorporated, Xxxxxxxxxxx & Co., Inc. and X.X. Xxxxxxx & Sons, Inc.
and any other person named as an underwriter of the APS in the Underwriting
Agreement or any schedule thereto.
(n) "Underwriting Agreement" shall mean the Underwriting
Agreement dated March ___, 1992 among the Fund and the Underwriters.
1.3 Rules of Construction. Unless the context or use indicates
another or different meaning or intent, the following rules shall apply to the
construction of this Agreement:
(a) Words importing the singular number shall include the
plural number and vice versa.
(b) The captions and headings herein are solely for
convenience of reference and shall not constitute a part of this Agreement nor
shall they affect its meaning, construction or effect.
(c) The words "hereof", "herein", "hereto" and other words of
similar import refer to this Agreement as a whole.
(d) All references herein to a particular time of day shall
be to New York City time.
2. The Auction.
2.1 Purpose; Incorporation by Reference of Auction Procedures and
Settlement Procedures. (a) The APS Provisions provide that the Applicable Rate
per annum for each series of APS for each Subsequent Dividend Period after the
Initial Dividend Period with respect to each
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series of APS 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 Subsequent Dividend Period from
implementation of the Auction Procedures for such series. Each periodic
implementation of the Auction Procedures is hereinafter referred to as an
"Auction." The Board of Trustees has adopted a resolution appointing Bankers
Trust Company as Auction Agent for purposes of the Auction Procedures for each
series of the APS. 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 APS for each
Subsequent 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 sys prior to the first Auction Date
for the first series of APS, the Fund shall provide the Auction Agent with a
list of the Broker-Dealers and a manually signed copy of each Broker-Dealer
Agreement for execution by the Auction Agent. Not later than seven days prior to
any Auction Date for any series of APS 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 Dividend Period of any series of APS pursuant to Section 4 of Part I of
the APS Provisions, 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 Dividend Period, the Fund shall provide the Auction Agent with a list of
the Broker-Dealers for such series and a manually signed copy of each
Broker-Dealer Agreement or a new Schedule A to the Broker-Dealer Agreement
(which Schedule A shall replace and supersede any previous Schedule A to such
Broker-Dealer Agreement)
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with each Broker-Dealer 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.
(b) in the event that any Auction Date for any series of APS
shall be changed after the Auction Agent shall have given the notice referred to
in clause (vi) of paragraph (a) of the Settlement Procedures, or after the
notice referred to in Section 2.5(a) hereof, if applicable, the Auction Agent,
by such means as the Auction Agent deems practicable, shall give notice of such
change to the Broker-Dealers for such series not later than the earlier of 9:15
A.M. on the new Auction Date or 9:15 A.M. on the old Auction Date.
(c) (i) The Auction Agent shall maintain a registry of the
beneficial owners of the shares of each series of APS who shall
constitute Existing Holders of shares of such series of APS 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 APS. 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 APS 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 in writing whenever the number of Existing Holders is 500 or
more. The Auction Agent may rely upon, as conclusive evidence of the
identities of the Existing Holders of shares of any series of APS, (A)
such list, (B) the results of Auctions and (C) notices from any
Existing Holder, the Agent member of any Existing Holder or the
Broker-Dealer of any Existing Holder as de-
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scribed in the first sentence of Section 2.2(c)(iii) hereof.
(ii) In the event of any partial redemption of any series
of APS, the Auction Agent shall, at least two Business Days prior to
the next Auction for such series, request the Agent Member of each
Existing Holder of shares of APS of such series to disclose to the
Auction Agent (upon selection by such Agent Member of the Existing
Holders whose shares of APS of such series are to be redeemed) the
number of shares of APS of such series, if any, of such Existing Holder
which are subject to such redemption, 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 shall request such
information. Upon any refusal of an Agent member to release such
information, the Auction Agent shall deliver to such Agent Member a
facsimile copy of the Existing Holder's Master Purchaser's Letter,
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 APS of such series shown in the Auction Agent's registry.
(iii) The Auction Agent shall be required to register a
transfer of shares of APS of any series from an Existing Holder of such
shares of APS to another Person only if such transfer is made to a
Person that has delivered, or on whose behalf has been delivered, a
signed Master Purchaser's Letter to the Auction Agent and if (A) such
transfer is pursuant to an Auction or (B) the Auction Agent has been
notified in writing (I) 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 or (II) in a notice substantially
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in the form of Exhibit E to the Broker-Dealer Agreements by the
Broker-Dealer of any Person that purchased or sold such APS in an
Auction of the failure of such shares of APS to be transferred as a
result of such Auction. 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.
(iv) The Auction Agent is not required to accept the
Master Purchaser's Letter of any Potential Holder who wishes to submit
a Bid for the first time in an Auction or of any Potential Holder or
Existing Holder who wishes to amend its Master Purchaser's Letter
unless such letter or amendment 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 their
respective customers that such Broker-Dealers believe are Existing Holders of
shares of any series of APS. 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 APS to any Person other than the Fund and the
Broker-Dealer that provided such information.
2.3 Information Concerning Rates. (a) The Applicable Percentage on the date
of this Agreement for APS is 110%. If there is any change in the credit rating
of APS by either of the rating agencies (or substitute or successor rating
agencies) referred to in the definition of "Applicable Percentage" resulting in
any change in the Applicable Percentage for APS after the date of this
Agreement, the Fund shall notify the Auction Agent in writing of such change in
the Applicable Percentage prior to 12:00 Noon on the Business Day prior to the
next Auction Date for any series of APS succeeding such change. If the Fund
designates all or a portion of any dividend on shares of any series of APS to
consist of net capital gains or other income taxable for federal income tax
purposes; it will indicate, in its notice in the form of Exhibit K hereto to the
Auction Agent pursuant to Section 2.6 hereof, the Applicable Percentage for such
series to
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be in effect for the Auction Date on which the dividend rate for such dividend
is to be fixed. In determining the Maximum Rate for any series of APS on any
Auction Date as set forth in Section 2.3(b)(i) hereof, the Auction Agent shall
be entitled to rely on the last Applicable Percentage for APS of which it has
most recently received notice from the Fund (or, in the absence of such notice,
the percentage set forth in the first sentence of this paragraph (a)), except
that if the Fund shall have notified the Auction Agent of an Applicable
Percentage to be in effect for an Auction Date in accordance with the preceding
sentence, the Applicable Percentage in effect for the next succeeding Auction
Date of any series of APS shall be, unless the fund notifies the Auction Agent
of a change in the Applicable Percentage for such succeeding Auction Date
pursuant to this Section 2.3(a), the Applicable Percentage that was in effect on
the first preceding Auction Date for APS with respect to which the dividend, the
rate for which was fixed on such Auction Date, did not include any net capital
gains or other income taxable for federal income tax purposes.
(b) (i) On each Auction Date for any series of APS, the Auction Agent
shall determine the Maximum Rate for such series. The Maximum Rate for any
series of APS on any Auction Date shall be:
(A) in the case of any Auction Date which is
not the Auction Date immediately prior to the first day of any
proposed Special Dividend Period designated by the Fund pursuant
to Section 4 of Part I of the APS Provisions, the product of (1)
the "AA" Composite Commercial Paper Rate on such Auction Date
for the next Rate Period of such series and (2) the Applicable
Percentage on such Auction Date, unless such series has or had a
special Dividend Period (other than a Special Dividend Period of
28 Rate Period Days or less) and an Auction at which Sufficient
Clearing Bids existed has not yet occurred for a Minimum
Dividend Period of such series after such Special Dividend
Period, in which case the higher of:
(1) the dividend rate
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on shares of such series for the then-ending Rate Period,
and
(2) the product of (x) the higher of (I) the "AA"
Composite Commercial Paper Rate on such Auction Date for
the then-ending Rate Period of such series, if such Rate
Period consists of less than four Dividend Periods, or
the Treasury Rate on such Auction Date for such Rate
Period, if such Rate Period consists of four or more
Dividend Periods and (II) the "AA" Composite Commercial
Paper Rate on such Auction Date for such Special Dividend
Period of such series, if such Special Dividend Period is
less than four Dividend Periods, or the Treasury Race on
such Auction Date for such Special Dividend Period, if
such Special Dividend Period consists of four or more
Dividend Periods, and (y) the Applicable Percentage on
such Auction Date; or
(B) in the case of any Auction Date which is the
Auction Date immediately prior to the first day of any proposed
Special Dividend Period designated by the Fund pursuant to
Section 4 of Part I of the APS Provisions, the product of (1)
the highest of (x) the "AA" Composite Commercial Paper Rate on
such Auction Date for the then-ending Rate Period of such
series, if such Rate Period consists of less than four Dividend
Periods, or the Treasury Rate on such Auction Date for such Rate
Period, if such Rate Period consists of four or more Dividend
Periods, (y) the "AA" Composite Commercial Paper Rate on such
Auction Date for such Special Dividend Period of such series for
which the Auction is being held, if such Special Dividend Period
consists of less than four Dividend Periods, or the Treasury
Rate on such Auction Date for such Special Dividend Period of
such series for which the
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Auction is being held, if such Special Dividend Period consists
of four or more Dividend Periods, and (z) the "AA" Composite
Commercial Paper Rate on such Auction Date for Minimum Dividend
Periods and (2) the Applicable Percentage on such Auction Date.
Not later than 9:10 A.M. on each Auction Date, the Auction Agent shall
notify the Fund and the Broker-Dealers of the Maximum Rate so
determined and the "AA" Composite Commercial Paper Rate(s) and
Treasury Rate(s), as the case may be, used to make such determination.
(ii) From and after a Failure to Deposit by the
Fund during any Rate Period of any series of APS, until
such failure is cured and a late charge, if applicable,
is paid, in accordance with subparagraph (c)(i) of
Section 2 of Part I of the APS Provisions, on the first
day of each Rate Period of such series the Auction Agent
shall determine the Treasury Rate for such Rate Period
with four or more Dividend Periods and the "AA" Composite
Commercial Paper Rate for Minimum Dividend Periods and
Rate Periods with less than four Dividend Periods. Not
later than 9:30 A.M. on each such first day, the Auction
Agent shall notify the Fund of the applicable "AA"
Composite Commercial Paper Rate and Treasury Rate.
(iii) If any "AA" Composite Commercial Paper Rate
or Treasury Rate, as the case may be, is not quoted on an
interest basis, the Auction Agent shall convert the
quoted rate to the interest equivalent thereof as set
forth in the definition of such rate in the APS
Provisions if the rate obtained by the Auction Agent is
quoted on a discount basis, or if such rate is quoted on
a basis other than an interest or discount 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.
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(iv) 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 immediately 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.
(v) If any Treasury 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 immediately 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 Dealer or U.S. Government
Securities Dealers. The Fund shall promptly advise the
Auction Agent of any such selection.
(c) The greater of the maximum marginal
regular federal individual income tax rate applicable to
ordinary income or the maximum marginal regular federal
corporate income tax rate (the "Highest Marginal Rate") on the
date of this Agreement is 34%. If there is any change in the
Highest Marginal Rate, the Fund shall notify the Auction Agent
in writing of such change prior to 12:00 Noon on the Business
Day prior to the next Auction Date for APS succeeding such
change. In determining the Maximum Rate for any series of APS on
any Auction Date, the Auction Agent shall be entitled to rely on
the Highest Marginal Rate of which it has most recently received
notice from the Fund (or, in the absence of such notice, the
percentage set forth in the first sentence of this paragraph
(c)).
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2.4 Auction Schedule. 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 Fund, which consent shall not be
unreasonably withheld. The Auction Agent shall give written notice of any such
change to each Broker-Dealer. Such notice shall be given prior to the close of
business on the Business Day next preceding the first Auction Date on which any
such change shall be effective.
Time Event
By 9:30 A.M. Auction Agent advises the Fund and
Broker-Dealers of the applicable
Maximum Rate and the "AA" Composite
Commercial Paper Rate(s) and
Treasury Rate(s), as the case may
be, used in determining such
Maximum Rate as set forth in
Section 2.3(b)(i) hereof.
9:30 A.M. - 1:30 P.M. Auction Agent assembles information
communicated to it by
Broker-Dealers as provided in
Section 3(a) of the Auction
Procedures. Submission Deadline is
1:30 P.M.
Not earlier than 1:30 P.M. Auction Agent makes determinations
pursuant to Section 4(a) of the
Auction Procedures.
By approximately 3:00 P.M. Auction Agent advises Fund of
results of Auction as provided in
Section 4(b) of the Auction
Procedures. Submitted Bids and
Submitted Sell orders are accepted
and rejected and shares of APS
allocated as provided in Section 5
of the Auction Procedures. Auction
Agent gives notice of Auction
results as set forth in
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Draft February 24, 1992
__:__ PM
paragraph (a) of the Settlement
Procedures.
2.5 Designation of Special Dividend Period. (a) The APS Provisions will
provide that, subject to the Fund's option to designate a Special Dividend
Period as referred to in paragraph (b) of this Section 2.5, (i) each Rate Period
of any series of APS will be a Minimum Dividend Period (a duration of 28 Rate
Period Days, subject to certain exceptions with respect to APS Series A, APS
Series B, APS Series C and APS Series D and (ii) each Rate Period following a
Rate Period of any series of APS that is other than a Minimum Dividend Period
will be a Minimum Dividend Period. Not less than 10 nor more than 20 days prior
to the last day of any such Rate Period that is not a Minimum Dividend Period,
(i) the Fund shall deliver to the Auction Agent a notice of the Auction Date of
the next succeeding Auction for such series in the form of Exhibit E hereto and
(ii) the Auction Agent shall deliver such notice by first-class mail, postage
prepaid, to each Existing Holder of shares of such series at the address
specified in such Existing Holder's Master Purchaser's Letter and to the
Broker-Dealers for such series as promptly as practicable after its receipt of
such notice from the Fund.
(b) Pursuant to the APS Provisions, the Fund may, at its
option, designate a Special Dividend Period for any series of APS in the manner
described in Section 4 of Part I of the APS Provisions.
(i) if the Fund proposes to designate any succeeding
Subsequent Dividend Period of any series of APS as a Special Dividend
Period of more than 28 Rate Period Days, (A) the Fund shall deliver to
the Auction Agent a notice of such proposed Special Dividend Period in
the form of Exhibit F hereto not less than 20 nor more than 30 days
prior to the first day of such proposed Special Dividend Period and (B)
the Auction Agent on behalf of the Fund shall deliver such notice by
first-class mail, postage prepaid, to each Existing Holder of shares of
such series of APS at the address specified in such Existing Holder's
Master Purchaser's Letter and to the Broker-Dealers for such series as
promptly as practi-
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__:__ PM
cable after its receipt of such notice from the Fund.
(ii) If the Board of Trustees determines to designate
such succeeding Subsequent Dividend Period as a Special Dividend
Period, (A) the Fund shall deliver to the Auction Agent a notice of
such determination in the form of Exhibit G hereto not later than 11:00
A.M. on the second Business Day next preceding the first day of such
proposed Special Dividend Period and (B) the Auction Agent shall
deliver such notice to the Broker-Dealers for such series not later
than 3:00 P.M. on such second Business Day.
(iii) If the Fund shall deliver to the Auction Agent a
notice stating that the Fund has determined not to exercise its option
to designate such succeeding Subsequent Dividend Period as a Special
Dividend Period with respect to which it has delivered a notice in the
form of Exhibit F hereto not later than 11:00 A.M. on the second
Business Day next preceding the first day of such proposed Special
Dividend Period, or shall fail to timely deliver either such notice or
a notice in the form of Exhibit G hereto, the Auction Agent shall
deliver a notice in the form of Exhibit H hereto to the Broker-Dealers
for such series not later than 3:00 P.M. on such second Business Day.
A change in the length of a Rate Period to a Rate Period of more than 28 Rate
Period Days shall not occur if (a)- on the Auction Date next preceding the first
day of such Special Dividend Period Sufficient Clearing Bids shall not exist or
(b) a Failure to Deposit shall have occurred prior to such change with respect
to shares of such series of APS and shall not have been cured in accordance with
the APS Provisions.
2.6 Allocation of Taxable Income. The Fund may, at its option,
designate all or a portion of any dividend on shares of any series of APS to
consist of net capital gains or other income taxable for federal income tax
purposes by delivering to the Auction Agent a notice in the form of Exhibit K
hereto of such designation 15
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Draft February 24, 1992
__:__ PM
days prior to the Auction Date on which the Applicable rate for such dividend is
to be fixed. The Auction Agent will deliver such notice to the Broker-Dealers
for such series on the Business Day following its receipt of such notice from
the Fund. Within two Business Days after any Auction Date involving the
allocation of income taxable for federal income tax purposes, the Auction Agent
shall notify each Broker-Dealer for the related series as to the dollar amount
per share of such taxable income and income exempt from federal income taxation
included in the related dividend.
2.7 Failure to Deposit. (a) If:
(i) any Failure to Deposit shall have occurred with
respect to shares of any series of APS during any Rate Period thereof
(other than any Special Dividend Period consisting of four or more
Dividend Periods or any Rate Period succeeding any Special Dividend
Period consisting of four or more Dividend Periods during which a
Failure to Deposit occurred that has not been cured); and
(ii) prior to 12:00 Noon, New York City time, on the
third Business Day next succeeding the date on which such Failure to
Deposit occurred, such Failure to Deposit shall have been cured in
accordance with the next succeeding sentence and the Fund shall have
paid to the Auction Agent a late charge equal to the sum of (A) if such
Failure to Deposit consisted of the failure timely to pay to the
Auction Agent the full amount of dividends with respect to any Dividend
Period on the shares of such series, an amount computed by multiplying
(1) 200% of the "AA" Composite Commercial Paper Rate for the Rate
Period during which such Failure to Deposit occurs on the Dividend
Payment Date for such Dividend Period by (2) a fraction, the numerator
of which shall be the number of days for which such Failure to Deposit
has not been cured in accordance with the next succeeding sentence
(including the day such Failure to Deposit occurs and excluding the day
such Failure to Deposit is cured) and the denominator of which shall be
365, and applying the rate obtained against the aggre-
15
Draft February 24, 1992
__:__ PM
gate liquidation preference of the outstanding shares of such series of
APS and (B) if such Failure to Deposit consisted of the failure timely
to pay to the Auction Agent the Optional Redemption Price or Mandatory
Redemption Price, as the case may be, of the shares of such series of
APS, if any, for which Notice of Redemption has been given by the Fund
pursuant to paragraph (b) of Section 3 of Part I of the APS Provisions,
an amount computed by multiplying (x) 200% of the "AA" Composite
Commercial Paper Rate for the Rate Period during which such Failure to
Deposit occurs on the redemption date by (y) a fraction, the numerator
of which shall be the number of days for which such Failure to Deposit
was not cured in accordance with the next succeeding sentence
(including the day such Failure to Deposit occurs and excluding the day
such Failure to Deposit was cured) and the denominator of which shall
be 365, and applying the rate obtained against the aggregate
liquidation preference of the outstanding shares of such series of APS
to be redeemed,
then the Auction Agent shall deliver a notice in the form of Exhibit I hereto by
first-class mail, postage prepaid, to the Broker-Dealers for such series not
later than one Business Day after its receipt of the payment from the Fund
curing such Failure to Deposit and such late charge. A Failure to Deposit with
respect to any series of APS shall have been cured (if such Failure to Deposit
is not solely due to the willful failure of the Fund to make the required
payment to the Auction Agent) with respect to any Rate Period thereof if, not
later than 12:00 Noon, New York City time, on the fourth Business Day preceding
the Auction Date for the Rate Period subsequent to such Rate Period, the Fund
shall have paid to the Auction Agent (A) all accumulated and unpaid dividends on
the shares of such series of APS and (B) without duplication, the Optional
Redemption Price or Mandatory Redemption Price, as the case may be, for the
shares of such series of APS, if any, for which Notice of Redemption has been
given by the Fund pursuant to paragraph (b) of Section 3 of Part I of the APS
Provisions.
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Draft February 24, 1992
__:__ PM
(b) If:
(i) any Failure to Deposit shall have occurred with respect to
shares of any series of APS during a Rate Period thereof (other than
any Special Dividend Period consisting of four or more Dividend Periods
or any Rate Period succeeding any Special Dividend Period consisting of
four or more Dividend Periods during which a Failure to Deposit
occurred that has not been cured), and, prior to 12:00 Noon on the
third Business Day next succeeding the date on which such Failure to
Deposit occurred, such Failure to Deposit shall not have been cured
within the meaning of the last sentence of Section 2.7(a) hereof and
the Fund shall not have paid to the Auction Agent the late charge
described in such Section 2.7(a), but such Failure to Deposit shall
subsequently be so cured; or
(ii) any Failure to Deposit shall have occurred with respect to
shares of any series of APS during a Special Dividend Period consisting
of four or more Dividend Periods, or during any Rate Period succeeding
any Special Dividend Period consisting of four or more Dividend Periods
during which a Failure to Deposit occurred, and such Failure to Deposit
shall subsequently have been cured within the meaning of the last
sentence of Section 2.7(a) hereof,
then the Auction Agent shall deliver a notice in the form of Exhibit J hereto to
the Broker-Dealers for such series not later than one Business Day after the
receipt of the payment from the Fund during such Failure to Deposit.
Notwithstanding the foregoing, the Auction Agent shall conduct an Auction on an
Auction Date which occurs simultaneously with the date of commencement of a
Failure to Deposit.
2.8 Broker-Dealers. (a) Not later than 12:00 Noon on each Auction
Date for any series of APS, 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 2.8 of the Broker-Dealer Agreements for such series. The
Auction Agent shall
17
Draft February 24, 1992
__:__ PM
apply such moneys as set forth in Section 2.8 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, provided that at
least one Broker-Dealer Agreement would be in effect for each series of APS
after such termination.
(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 APS to which
such Broker-Dealer Agreement relates.
2.9 Ownership of Shares of APS. The Fund shall notify the Auction
Agent if the Fund or any affiliate of the Fund acquires any shares of APS of any
series. Neither the Fund nor any affiliate of the Fund shall submit any Order in
any Auction for APS, 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 2.9, 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 trustee of the Fund. The Auction Agent shall have no
duty or liability with respect to enforcement of this Section 2.9.
2.10 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
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Draft February 24, 1992
__:__ PM
Auction Agent shall maintain records relating to any Auction for a period of six
years after such Auction, and such records shall, in reasonable detail,
accurately and fairly reflect the actions taken by the Auction Agent hereunder.
2.11 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 such series, in funds
available on such Dividend Payment Date in The City of New York, New York, the
full amount of any dividend (whether or not earned or declared) to be paid on
such Dividend Payment Date on any share of such series (B) on the Business Day
next preceding any redemption date 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 any share of such series after notice of
redemption is given as set forth in the Certificate of Vote.
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 APS of any series (i) on each Dividend
Payment Date for such series, dividends on the shares of APS of such series,
(ii) on any date fixed for redemption of shares of APS 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 Rate
Period for any series of APS 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 APS Provisions 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 APS
Provisions with respect to such series. The Fund shall notify the Auction Agent
in writing of a decision to redeem shares of any series of APS at least five
days prior to the date a notice of redemption is required to be mailed to the
Holders of the shares to be redeemed by paragraph (b) of Section 3 of
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Draft February 24, 1992
__:__ PM
Part I of the APS Provisions. 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
APS Provisions 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 APS, one certificate representing all of the shares of such
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 APS
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 APS indicating restrictions on transfer
shall be accompanied by an opinion of counsel stating that such legends may be
removed and such shares freely transferred, such opinion to be delivered under
cover of a letter from a Fund Officer authorizing the Auction Agent to remove
the legend on the basis of said opinion.
4.4 Lost Share Certificates. The Auction Agent shall 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 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 Cancelled Certificates; Record Retention. The
Auction Agent shall retain all share certificates which have been cancelled in
transfer
20
Draft February 24, 1992
__:__ PM
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, Bankers
Trust Company, is acting as the transfer agent for any series of APS pursuant to
this Agreement, it shall maintain a share transfer book containing a list of the
Holders of the shares of each series of APS, 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. The Auction Agent reserves the right,
however, to exhibit the share transfer books or other books to any Person in
case it is advised by its counsel that its failure to do so would be unlawful.
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 APS of any series, that remain unpaid after ninety days shall be
repaid to the Fund upon the written request of the Fund, together with interest,
if any, earned thereon.
5. Representations and Warranties of the Fund.
The Fund represents and warrants to the Auction Agent that:
(a) the Fund has been duly organized and is subsisting as a
voluntary association with transferable shares (commonly referred to as a
business trust)
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Draft February 24, 1992
__:__ PM
under the laws of The Commonwealth of Massachusetts and has all necessary power
and authority to execute and deliver this Agreement and to authorize, create and
issue the shares of each series of APS;
(b) this Agreement has been duly and validly authorized,
executed and delivered by the Fund and, assuming due authorization, execution
and delivery by the Auction Agent, constitutes the legal, valid and binding
obligation of the Fund subject, as to enforceability, to bankruptcy, insolvency,
reorganization, moratorium, receivership or similar laws, whether statutory or
decisional, relating to or affecting creditors' rights and to general equitable
principles (regardless of whether enforcement is sought in equity or at law);
(c) the form of the certificate evidencing the shares of APS
complies with all applicable laws of The Commonwealth of Massachusetts;
(d) the shares of APS, when issued, delivered and paid for on
the Date of Original Issue as contemplated by the Underwriting Agreement, will
have been duly authorized, validly issued, fully paid and nonassessable, except
as provided under Massachusetts law;
(e) assuming the Underwriters comply with their obligations
under the Underwriting Agreement and that the purchasers of the APS comply with
their obligations in the Master Purchaser's Letter, no consent, authorization or
order of, or filing or registration with, any court, governmental agency or
official (except such as have been obtained and such as may be required under
the Securities Act of 1933, as amended, or the Investment Company Act of 1940,
as amended, or under the blue sky or state securities laws) is required in
connection with the execution and delivery of this Agreement or the issuance of
the shares of the APS; and
(f) the issuance and sale of the APS, the execution, delivery
and performance of this Agreement, compliance by the Fund with all provisions
hereof, and the consummation of the transactions contemplated hereby or by the
Underwriting Agreement or the Broker-Dealer Agreements, will not conflict with,
constitute a breach of any of the terms or provisions of, or a default under, or
result in the creation or imposition of any material
22
Draft February 24, 1992
__:__ PM
lien, charge or encumbrance upon any of the assets of the Fund pursuant to the
terms of any agreement, indenture or instrument to which the Fund is a party or
by which the Fund is bound, or result in a violation of the Declaration of
Trust, APS Provisions or By-Laws of the Fund or of any order, rule or regulation
of any court or governmental agency having jurisdiction over the Fund or its
property which conflict, breach, default, lien or violation, individually or in
the aggregate, would have a material adverse effect on the business, financial
position or results of operations of the Fund.
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 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 the
Broker-Dealer Agreements, and no implied covenants or obligations shall be read
into this Agreement against the Auction Agent.
(c) In the absence of bad faith or gross 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 grossly
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 APS of any series, that remain with the Auction Agent after 90 days
shall be repaid to the Fund upon the written request of the Fund, together with
interest, if any, earned thereon.
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 be-
23
Draft February 24, 1992
__:__ PM
lieved 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 reasonably
acceptable to the Fund and the advice of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon.
(c) The Auction Agent shall not be required to advance,
expend or risk its own funds or otherwise incur or become exposed to financial
liability in the performance of its duties hereunder.
(d) The Auction Agent may perform its duties and exercise its
rights hereunder either directly or by or through agents or attorneys and shall
not be responsible for any 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).
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 as to the due authorization, execution
and delivery of this Agreement), the Broker-Dealer Agreements (except as to the
Auction Agent's duties thereunder or the shares of any series of APS.
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 Agreements 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 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
24
Draft February 24, 1992
__:__ PM
its agents and counsel), except any expense or disbursement attributable to its
gross negligence or bad faith.
(c) The Fund shall indemnify the Auction Agent for and hold
it harmless against, any loss, liability or expense incurred without gross
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 its duties hereunder and
thereunder for which indemnification is provided by this subsection.
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 in writing,
provided that the Fund has entered into an agreement in substantially the form
of this Agreement with a successor auction agent. The Auction Agent may
terminate this Agreement upon written notice to the Fund, such termination to be
effective on the earlier of (i) the date specified in such notice which shall
not be earlier than 90 days after the giving of such notice or (ii) the date on
which a successor trust company 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 2.10 and 4.5 hereof shall survive the termination hereof. 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)
communica-
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Draft February 24, 1992
__:__ PM
tions 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 Company, Van Xxxxxx Xxxxxxx
addressed: Trust For Investment
Grade Municipals
Xxx Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: Treasurer
Telephone No.: (000) 000-0000
With a copy sent to:
Xxxxxx XxXxxxxxx
Xxx Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
If to the Auction Bankers Trust Company
Agent, addressed: Corporate Trust and Agency Group
Four Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Auction Rate Securities
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
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
representa-
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__:__ PM
tions, endorsements, premises, agreements or understandings, oral, written or
inferred, between the parties.
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. The Fund shall notify the Auction
Agent and each Broker-Dealer of any change in the Fund's Declaration of Trust,
as amended and restated as of the date hereof, 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 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 Limitation of Liability. Pursuant to the provisions of Article
V, Section 5.5 of the Fund's Declaration of Trust, as amended or restated as of
the date hereof, this Agreement is entered into by the trustees of the Fund not
individually, but as trustees under such Declaration of Trust and the
obligations of the Fund hereunder are not binding upon any such trustees or
shareholders of the Fund, individually, but bind only the trust estate.
7.8 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.
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__:__ PM
7.9 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.
7.10 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Auction Agency
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the date first above written.
VAN XXXXXX XXXXXXX
TRUST FOR INVESTMENT
GRADE MUNICIPALS
By _____________________________________
Name: Xxxxxx X. XxXxxxxxx
Title: President
BANKERS TRUST COMPANY
By _____________________________________
Name:
Title:
28
Draft February 24, 1992
__:__ PM
EXHIBIT A
FORM OF
BROKER-DEALER AGREEMENT
Draft February 24, 1992
__:__ PM
EXHIBIT B
FORM OF
MASTER PURCHASER'S LETTER
Draft February 24, 1992
__:__ PM
EXHIBIT C
SETTLEMENT PROCEDURES
Draft February 24, 1992
__:__ PM
EXHIBIT D
FORM OF APS PROVISIONS
Draft February 24, 1992
__:__ PM
EXHIBIT E
VAN XXXXXX XXXXXXX TRUST FOR INVESTMENT GRADE MUNICIPALS
NOTICE OF AUCTION DATE FOR
AUCTION PREFERRED SHARES
("APS")
NOTICE IS HEREBY GIVEN that the Auction Date of the next Auction for
the APS Series ___ of VAN XXXXXX XXXXXXX TRUST FOR INVESTMENT GRADE MUNICIPALS
(the "Fund") is scheduled to be ___________ and the next Dividend Payment Date
for the Fund's APS Series ___ will be __________.
[A Failure to Deposit in respect of the APS Series ___ currently
exists. If such Failure to Deposit is not cured prior to 12:00 Noon on the
fourth Business Day prior to the next scheduled Auction Date of the APS Series
___ as defined, the next Auction will not be held. Notice of the next Auction
for the APS Series __ will be delivered when such Failure to Deposit is cured.1]
VAN XXXXXX XXXXXXX
TRUST FOR INVESTMENT
GRADE MUNICIPALS
_______________
(1) Include this language if a Failure to Deposit exists.
Draft February 24, 1992
__:__ PM
EXHIBIT F
VAN XXXXXX XXXXXXX TRUST FOR INVESTMENT GRADE MUNICIPALS
NOTICE OF PROPOSED CHANGE OF
LENGTH OF RATE PERIOD OF
AUCTION PREFERRED SHARES
("APS")
NOTICE IS HEREBY GIVEN that VAN XXXXXX XXXXXXX TRUST FOR INVESTMENT
GRADE MUNICIPALS (the "Fund") may exercise its option to designate the Rate
Period of its APS Series ___ commencing [the first day of the proposed Special
Dividend Period] as a Special Dividend Period.
By 11:00 A.M. on the second Business Day next preceding the first day
of such proposed Special Dividend Period, the Fund will notify Bankers Trust
Company of either (a) its determination to exercise such option, designating the
length of such Special Dividend Period and the terms of the Specific Redemption
Provisions, if any, for such series or (b) its determination not to exercise
such option.
VAN XXXXXX XXXXXXX
TRUST FOR INVESTMENT
GRADE MUNICIPALS
Dated:_____________________
Draft February 24, 1992
__:__ PM
EXHIBIT G
VAN XXXXXX XXXXXXX TRUST FOR INVESTMENT GRADE MUNICIPALS
NOTICE OF CHANGE OF LENGTH OF RATE PERIOD OF
AUCTION PREFERRED SHARES
("APS")
NOTICE IS HEREBY GIVEN that VAN XXXXXX XXXXXXX TRUST FOR INVESTMENT
GRADE MUNICIPALS (the "Fund") has determined to designate the Rate Period of its
APS Series ___ commencing on [the first day of the Special Dividend Period] as a
Special Dividend Period.
The Special Dividend Period will be ___ [days] [year[s]].
The Auction Date for the Special Dividend Period is [the Business Day
next preceding the first day of such Special Dividend Period].
[Specific Redemption Provisions, if applicable.]
[As a result of the Special Dividend Period designation, the amount of
dividends payable on APS Series ___ during the Special Dividend Period will be
based on a 360-day year] [include if Rate Period is greater than 28 Rate Period
Days].
The Special Dividend Period shall not commence if (a) on such Auction
Date Sufficient Clearing Bids shall not exist or (b) if a Failure to Deposit
shall have occurred prior to the first day thereof with respect to shares of
such series of APS.
The scheduled Dividend Payment Dates for such series of APS during such
Special Dividend Period will be _________________________.
VAN XXXXXX XXXXXXX
TRUST FOR INVESTMENT
GRADE MUNICIPALS
Dated:_____________________
Draft February 24, 1992
__:__ PM
EXHIBIT H
VAN XXXXXX XXXXXXX TRUST FOR INVESTMENT GRADE MUNICIPALS
NOTICE OF DETERMINATION NOT TO CHANGE
LENGTH OF RATE PERIOD OF
AUCTION PREFERRED SHARES
("APS")
NOTICE IS HEREBY GIVEN that VAN XXXXXX XXXXXXX TRUST FOR INVESTMENT
GRADE MUNICIPALS (the "Fund") has determined not to exercise its option to
designate a Special Dividend Period of its APS Series __ and the next succeeding
Dividend Period of such series will be a Minimum Rate Period of __ days.
VAN XXXXXX XXXXXXX
TRUST FOR INVESTMENT
GRADE MUNICIPALS
Dated:_____________________
Draft February 24, 1992
__:__ PM
EXHIBIT I
VAN XXXXXX XXXXXXX TRUST FOR INVESTMENT GRADE MUNICIPALS
NOTICE OF CURE OF
FAILURE TO DEPOSIT ON
AUCTION PREFERRED SHARES
("APS")
NOTICE IS HEREBY GIVEN that VAN XXXXXX XXXXXXX TRUST FOR INVESTMENT
GRADE MUNICIPALS (the "Fund") has cured its Failure to Deposit with respect to
its APS Series ___. The dividend rate on the shares of APS Series ___ for the
current Dividend Period is __________% per annum, the Dividend Payment Date for
the current Dividend Period is scheduled to be __________ and the next Auction
Date is scheduled to be __________.
VAN XXXXXX XXXXXXX
TRUST FOR INVESTMENT
GRADE MUNICIPALS
Dated:_____________________
Draft February 24, 1992
__:__ PM
EXHIBIT J
VAN XXXXXX XXXXXXX TRUST FOR INVESTMENT GRADE MUNICIPALS
NOTICE OF SUBSEQUENT CURE OF
FAILURE TO DEPOSIT ON
AUCTION PREFERRED SHARES
("APS")
NOTICE IS HEREBY GIVEN that VAN XXXXXX XXXXXXX TRUST FOR INVESTMENT
GRADE MUNICIPALS (the "Fund") has cured its Failure to Deposit with respect to
its APS Series ___. The next Auction Date for the APS Series ___ is scheduled
to be on __________.
VAN XXXXXX XXXXXXX
TRUST FOR INVESTMENT
GRADE MUNICIPALS
Dated:_____________________
