Exhibit k.(3)
DEPOSITORY AGREEMENT
THE BLACKSTONE MUNICIPAL TARGET TERM TRUST INC.
and
BANKERS TRUST COMPANY
November 21, 1991
The Depository Trust Company
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel's Office
Re: The Blackstone Municipal Target
Term Trust Inc. -- Issuance of Auction
Rate Municipal Preferred Stock
Gentlemen:
The purpose of this letter is to set forth certain matters
relating to the issuance and sales by The Blackstone Municipal Target Term
Trust Inc., a Maryland corporation (the "Issuer"), of 1,500 shares of
Auction Rate Municipal Preferred Stock, Series W7 (the "Series W7 Preferred
Shares"), 1,500 shares of Auction Rate Municipal Preferred Stock, Series
W28 (the "Series W28 Preferred Shares") and 1,500 shares of Auction Rate
Municipal Preferred Stock, Series F7 (the "Series F7 Preferred Shares").
The Series W7 Preferred Shares, the Series W28 Preferred Shares and the
Series F7 Preferred Shares are sometimes herein together called the
"Preferred Shares". Descriptions of the Series W7 and the Series W28
Preferred Shares and their related offering are contained in a prospectus,
dated November 14, 1991, and descriptions of the Series F7 Preferred Shares
and their related concurrent offering are contained in a prospectus, dated
November 14, 1991 (collectively, the "Prospectuses") copies of each of
which are attached hereto as Exhibit A. Bankers Trust Company, in its
capacity as Auction Agent (as defined in theProspectuses), will act as the
transfer agent, registrar, dividend disbursing agent and redemption agent
with respect to the Preferred Shares. The Preferred Shares are being
offered in two concurrent offerings: by underwriters represented by Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated in the case of the Series W7 and
the Series W28 Preferred Shares, and by underwriters represented by
Shearson Xxxxxx Brothers Inc. in the case of the Series F7 Preferred Shares
(collectively, the "Underwriters") and are being distributed through The
Depository Trust Company ("DTC").
To induce DTC to accept the Preferred Shares as eligible for
deposit at DTC and to act in accordance with its rules (the "DTC Rules")
with respect to the Preferred Shares, the Issuer and the Auction Agent make
the following representations to DTC:
1. Subsequent to the issuance of the Preferred Shares on
November 21, 1991 the Issuer shall cause the Underwriters to
deposit with DTC one share certificate representing the
Series W7 Preferred Shares, one share certificate
representing the Series W28 Preferred Shares and one share
certificate representing the Series F7 Preferred Shares,
each registered in the name of DTC's nominee, CEDE & CO.,
which will respectively represent the total number of shares
of Series W7 Preferred Shares, Series W28 Preferred Shares
and Series F7 Preferred Shares, and said certificates shall
remain in DTC's custody.
2. The Prospectus describes provisions for the solicitation of
consents from, and voting by, holders of the Preferred
Shares under certain circumstances. The Issuer shall
establish a record date or record dates for such purposes
and give DTC notice of such record date or dates not less
than 15 calendar days in advance of such record date or
dates to the extent practicable.
3. In the event of a full or partial redemption of outstanding
Preferred Shares the Issuer or the Auction Agent shall give
DTC notice of such event not less than 10 days nor more than
20 days prior to the redemption date.
4. In the event of a partial redemption of the Preferred Shares
outstanding, the Issuer or the Auction Agent shall send DTC
a notice specifying: the number of shares of the Series W7
Preferred Shares, the Series W28 Preferred Shares and the
Series F7 Preferred Shares, respectively, to be redeemed and
the date such notice is to be mailed to shareholders of the
Issuer or published ("Publication Date"). Such notice shall
be sent to DTC by a secure means (e.g., legible facsimile
transmission, registered or certified mail, overnight
express delivery or hand delivery) in a timely manner
designed to assure that such notice is in DTC's possession
no later than the close of business on the Business Day (as
defined in the Prospectus) before the Publication Date. (The
Issuer or the Auction Agent sending such notice shall have a
method to verify subsequently the use of such means and
timeliness of the notice.) In the event of a partial
redemption, the Publication Date shall not be less than 10
days nor more than 30 days prior to the redemption date.
5. The Prospectus indicates that the dividend rate for each of
the shares of the Series W7 Preferred Shares, the Series W28
Preferred Shares and the Series F7 Preferred Shares may vary
from time to time. Absent other existing arrangements with
DTC, the Issuer or the Auction Agent shall give DTC notice
of each such change in the dividend rate on the same day the
new rate is determined by telephone to the Supervisor of the
Dividend Announcement Section at (000) 000-0000 and such
notice shall be followed by prompt written confirmation sent
by a secure means as described in paragraph 4 above to:
Manager, Announcements, Dividend Department
The Depository Trust Company
0 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
6. The Prospectus indicates that each purchaser of any
Preferred Shares must sign a Purchaser's Letter (as defined
in the Prospectuses) that contains provisions restricting
transfer of the Preferred Shares purchased. The Issuer and
the Auction Agent acknowledge that as long as CEDE & CO. is
the sole record owner of the Preferred Shares, CEDE & CO.
shall be entitled to all voting rights applicable to the
Preferred Shares and to receive the full amount of all
dividends, liquidation proceeds and redemption proceeds
payable with respect to the Preferred Shares. The Issuer and
the Auction Agent acknowledge that DTC shall treat any DTC
Participant (defined in the DTC Rules to mean, generally,
securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations for
whom DTC, directly or indirectly, holds securities) having
Preferred Shares credited to its DTC account as entitled to
the full benefits of ownership of such Preferred Shares even
if the credits of Preferred Shares to the DTC account of
such DTC Participant result from transfers or failures to
transfer in violation of the provisions of the Purchaser's
Letter. Without limiting the generality of the preceding
sentence, the Issuer and the Auction Agent acknowledge that
DTC shall treat any DTC Participant having Preferred Shares
credited to its account as entitled to receive dividends,
distributions and voting rights, if any, in respect of such
Preferred Shares and, subject to Section 16 hereof, to
receive certificates evidencing such Preferred Shares if
such certificates are to be issued in accordance with the
Issuer's Charter (as defined in the Prospectuses). (The
treatment by DTC of the effects of the crediting by it of
Preferred Shares to the accounts of DTC Participants
described in the preceding two sentences shall not affect
the rights of the Issuer, participants in Auctions (as
defined in the Prospectuses) relating to the Preferred
Shares, purchasers, sellers or holders of Preferred Shares
against any DTC Participant.) DTC shall have no
responsibility to ascertain that any transfer of Preferred
Shares is made in accordance with the provisions of the
Purchaser's Letter. Notwithstanding anything to the
contrary, the parties acknowledge and agree that the Issuer
and the Auction Agent shall have no responsibility or
liability whatsoever for DTC's actions or omissions to act
in respect of the Preferred Shares.
7. The Prospectuses indicate that in the event the Issuer
retroactively allocates any net capital gains or other
taxable income to any series of Preferred Shares without
having given advance notice thereof to the Auction Agent as
described in the Prospectuses solely by reason of the fact
that such allocation is made as a result of the redemption
of all or a portion of the outstanding shares of any series
of Preferred Shares or the liquidation of the Issuer (the
amount of such allocation referred to herein as a
"Retroactive Taxable Allocation"), the Issuer will, within
90 days (and generally within 60 days) after the end of the
Issuer's fiscal year for which a Retroactive Taxable
Allocation is made, provide notice thereof to the Auction
Agent and to each holder of Preferred Shares (initially Cede
& Co. as nominee of DTC) during such fiscal year at such
holder's address as the same appears or last appeared on the
stock books of the Issuer. The Issuer 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 Preferred Shares), out of funds legally available
therefor, an amount equal to the aggregate Additional
Dividend (as defined in the Prospectuses) with respect to
all Retroactive Taxable Allocations made to such holders
during the fiscal year in question.
8. The Issuer will notify DTC, at least 10 business days prior
to the payment date for any Additional Dividends, of (i) the
record date for holders of Preferred Shares entitled to
receive Additional Dividends, (ii) the amount of Additional
Dividends payable on a per share basis to such holders and
(iii) the CUSIP number set forth on the share certificate
representing such Preferred Shares.
9. The Prospectus indicates that in the event of a Response (as
defined in the Prospectuses) it is advisable that the Issuer
give a Notice of Special Dividend Period (as defined in the
Prospectuses) for the Preferred Shares, the Issuer will by
no later than the second day prior to such Auction Date give
a Notice of Special Dividend (as defined in the
Prospectuses) to the Auction Agent, DTC and each
Broker-Dealer, which notice will specify the duration of the
Special Dividend Period and the Maximum Applicable Rate
therefor and the Specific Redemption Provisions, if any. The
Issuer is required to give telephonic and written notice (a
"Notice of Revocation") to the Auction Agent, each
Broker-Dealer, and DTC on or prior to the Business Day prior
to the relevant Auction Date under the circumstances
specified in the Prospectus.
10. All notices and payment advices sent to DTC shall contain
the CUSIP number set forth on the share certificate
representing the Series W7 Preferred Shares or on the share
certificate representing the Series W28 Preferred Shares or
on the share certificate representing the Series F7
Preferred Shares, as the case may be.
11. Notices to DTC by facsimile transmission shall be sent to
(000) 000-0000 or (000) 000-0000. Except as provided in
paragraph 5 hereof, notices to DTC by any other means shall
be sent to:
Manager, Reorganization Department
Reorganization Window
The Depository Trust Company
0 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
12. Dividend payments shall be received by CEDE & CO., as
nominee of DTC, or its registered assigns in same-day funds
on each payment date or the equivalent as agreed between the
Issuer or the Auction Agent and DTC ("Fed-Funds"). Such
payment shall be made payable to the order of "CEDE & CO."
Absent any other agreement between the Issuer or the Auction
Agent and DTC such payments shall be addressed as follows:
Manager, Cash Receipts, Dividends
The Depository Trust Company
0 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
13.Redemption payments shall be made in Fed-Funds in the manner
set forth in the SDFS Paying Agent Operating Procedures, a
copy of which is attached hereto as Exhibit B.
14. DTC may direct the Issuer or the Auction Agent to use any
other telephone number for facsimile transmission, address,
or department of DTC as the number, address or department to
which payments of dividends, redemption proceeds or notices
may be sent.
15. In the event of a redemption necessitating a reduction in
the number of Preferred Shares outstanding, the Issuer will
cause to be executed and delivered a new share certificate
representing the remaining outstanding Series W7 Preferred
Shares, the remaining outstanding Series W28 Preferred
Shares or the remaining outstanding Series F7 Preferred
Shares, as the case may be. Under such circumstances, DTC
agrees to submit the original certificate to the Auction
Agent for cancellation.
16. In the event the Issuer determines that beneficial owners of
the Preferred Shares (generally, the Existing Holders as
defined in the Issuer's Charter) shall be able to obtain
certificates representing the Series W7 Preferred Shares or
the Series W28 Preferred Shares or the Series F7 Preferred
Shares, as the case may be (as provided for in the Issuer's
Charter), the Issuer or the Auction Agent shall notify DTC
of the availability of share certificates representing the
Series W7 Preferred Shares, the Series W28 Preferred Shares
or the Series F7 Preferred Shares, as the case may be, and
shall issue, transfer and exchange such certificates as
required by DTC and others in appropriate amounts.
17. DTC may determine to discontinue providing its services as
securities depository with respect to the Preferred Shares
at any time by giving reasonable notice to the Issuer or the
Auction Agent (at which time DTC will confirm with the
Auction Agent the aggregate amount of the respective shares
of the Series W7 Preferred Shares, the Series W28 Preferred
Shares and the Series F7 Preferred Shares outstanding).
Under such circumstances the Issuer or the Auction Agent
will cooperate with DTC in taking appropriate action to
provide for a substitute or successor securities depository
or to make available one or more separate certificates
evidencing the shares of the Series W7 Preferred Shares, the
Series W28 Preferred Shares and the Series F7 Preferred
Shares, as the case may be, to any DTC Participant having
such shares credited to its DTC account.
18. The Issuer hereby authorizes DTC to provide to the Auction
Agent position listings of its DTC participants with respect
to the Preferred Shares from time to time at the request of
the Auction Agent, and also authorizes DTC, in the event of
a partial redemption of either the Series W7 Preferred
Shares, the Series W28 Preferred Shares or the Series F7
Preferred Shares, to provide, and DTC hereby agrees to
provide, the Auction Agent, upon request, with the names of
those DTC participants whose positions in such Preferred
Shares have been selected for redemption by DTC. DTC agrees
to use its best efforts to notify the Auction Agent of those
DTC participants whose positions in the Preferred Shares
have been selected for redemption by DTC and to provide the
Auction Agent with the names of the persons or departments
at such DTC participants to contact regarding such
redemption. The Issuer authorizes the Auction Agent to
provide DTC with such signatures, exemplars of signatures
and authorizations to act as may be deemed necessary by DTC
to permit DTC to discharge obligations to its DTC
participants and appropriate regulatory authorities.
This authorization, unless revoked by the Issuer, shall
continue with respect to the Preferred Shares while any such
Preferred Shares are on deposit at DTC, until and unless the
Auction Agent shall no longer be acting. In such event, the
Issuer shall provide DTC with similar evidence of the
authorization of any successor thereto so to act.
19. Nothing herein shall be deemed to require the Auction Agent
to advance funds on behalf of the Issuer.
Very truly yours,
THE BLACKSTONE MUNICIPAL
TARGET TERM TRUST INC.
as Issuer
By: /s/ [ILLEGIBLE]
-----------------------------------
Title:
BANKERS TRUST COMPANY
as Auction Agent
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------
XXXX X. XXXXXXXX
Title: ASSISTANT TREASURER
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
------------------------
Title GENERAL COUNSEL
cc: Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Shearson Xxxxxx Brothers Inc.
