EXHIBIT k.4
CALAMOS AUCTION AGENCY AGREEMENT
BASIC TERMS FOR ACTING AS AUCTION AGENT
RELATING TO
AUCTION RATE CUMULATIVE PREFERRED SHARES
July 31, 2003
TABLE OF CONTENTS
PAGE
1. DEFINITIONS AND RULES OF CONSTRUCTION...................................................................1
1.1 Terms Defined by Reference to Statement........................................................1
1.2 Terms Defined Herein...........................................................................1
1.3 Rules of Construction..........................................................................2
2. THE AUCTION.............................................................................................2
2.1 Purpose; Incorporation by Reference of Auction Procedures and Settlement Procedures............2
2.2 Preparation of Each Auction; Maintenance of Registry of Beneficial Owners......................3
2.3 Information Concerning Rates...................................................................5
2.4 Auction Schedule...............................................................................6
2.5 Designation of Dividend Period.................................................................7
2.6 Notice of Auction Results......................................................................8
2.7 Broker-Dealers.................................................................................8
2.8 Ownership of Preferred Shares..................................................................9
2.9 Access to and Maintenance of Auction Records...................................................9
2.10 Dividend and Redemption Price Deposit..........................................................9
3. THE AUCTION AGENT AS DIVIDEND AND REDEMPTION PRICE DISBURSING AGENT....................................10
4. THE AUCTION AGENT AS TRANSFER AGENT AND REGISTRAR......................................................10
4.1 Issue of Share Certificates...................................................................10
4.2 Registration of Transfer of Shares............................................................10
4.3 Removal of Legend on Restricted Shares........................................................10
4.4 Lost Share Certificates.......................................................................10
4.5 Disposition of Canceled Certificates; Record Retention........................................11
4.6 Share Transfer Books..........................................................................11
4.7 Return of Funds...............................................................................11
5. REPRESENTATIONS AND WARRANTIES OF THE FUND.............................................................11
6. THE AUCTION AGENT......................................................................................12
6.1 Duties and Responsibilities...................................................................12
6.2 Rights of the Auction Agent...................................................................13
6.3 Auction Agent's Disclaimer....................................................................14
6.4 Compensation, Expenses and Indemnification....................................................14
7. MISCELLANEOUS..........................................................................................14
7.1 Term of Agreement.............................................................................14
7.2 Force Majeure.................................................................................15
7.3 Communications................................................................................15
7.4 Entire Agreement..............................................................................16
7.5 Benefits......................................................................................16
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7.6 Amendment; Waiver.............................................................................16
7.7 Successors and Assigns........................................................................16
7.8 Severability..................................................................................16
7.9 Execution in Counterparts.....................................................................16
7.10 Governing Law.................................................................................16
EXHIBITS
EXHIBIT A - Form of Broker-Dealer Agreement
EXHIBIT B - Settlement Procedures
EXHIBIT C - Form of Notice of Auction Dates
EXHIBIT D - Form of Notice of Proposed Designation of Special Dividend Period
EXHIBIT E - Form of Notice of Designation of Special Dividend Period
EXHIBIT F - Form of Notice of Determination Not to Designate Special Dividend
Period
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These basic terms ("Basic Terms") set forth the general terms and
conditions pursuant to which a bank or trust company identified in a Request and
Acceptance Letter will act as auction agent (an "Auction Agent") for Preferred
Shares issued by an investment company registered under the Investment Company
Act of 1940, as amended, as further identified by such Request and Acceptance
Letter (a "Fund"), for which Calamos Asset Management, Inc. is the investment
adviser.
The Fund proposes to issue shares of Preferred Shares pursuant to its
Declaration of Trust, as amended or supplemented by the Statement. The Fund
desires that the Auction Agent perform certain duties in connection with the
Preferred Shares upon the terms and subject to the conditions of the Agreement.
1. Definitions and Rules of Construction
1.1 Terms Defined by Reference to Statement. Capitalized terms not
defined herein shall have the respective meanings specified in
the Statement.
1.2 Terms Defined Herein. As used herein and in the Settlement
Procedures, the following terms shall have the following
meanings, unless the context otherwise requires:
(a) "Adviser" shall mean Calamos Asset Management, Inc.
(b) "Agent Member" of any Person shall mean the member
of, or participant in, the Securities Depository.
(c) "Agreement" shall mean the Basic Terms, together with
the Request and Acceptance Letter relating to one or
more series of Preferred Shares.
(d) "Auction" shall have the meaning specified in Section
2.1 hereof.
(e) "Auction Procedures" shall mean the auction
procedures constituting Part II of the Statement.
(f) "Authorized Officer" shall mean each Vice President,
Assistant Vice President and Assistant Treasurer of
the Auction Agent assigned to the Dealing and Trading
Group of its Corporate Trust and Division and every
other officer or employee of the Auction Agent
designated as an "Authorized Officer" for purposes
hereof in a written communication to the Fund.
(g) "Broker-Dealer Agreement" shall mean each agreement
between the Auction Agent and a Broker-Dealer
substantially in the form attached hereto as Exhibit
A.
(h) "Fund Officer" shall mean the officers of the Fund.
(i) "Person" means and includes an individual, a
partnership, a corporation, a trust, an
unincorporated association, a joint venture or other
entity or a government or any agency or political
subdivision thereof.
(j) "Preferred Shares" shall mean the Preferred Shares,
no par value, of the Fund designated as its "_______"
and bearing such further designation as to series as
the Board of Trustees of the Fund or any committee
thereof shall specify; as set forth in the Request
and Acceptance Letter.
(k) "Request and Acceptance Letter" shall mean the letter
from the Fund to the Auction Agent pursuant to which
the Fund appoints the Auction Agent and the Auction
Agent accepts its appointment as auction agent for
the Preferred Shares.
(l) "Settlement Procedures" shall mean the Settlement
Procedures attached hereto as Exhibit B.
(m) "Statement" shall mean the Statement of Preferences
of Preferred Shares, and authorizing the issuance of,
one or more series of Preferred Shares, a copy of
which is attached to the Request and Acceptance
Letter, as the same may be amended, supplemented or
modified from time to time.
1.3 Rules of Construction. Unless the context or use indicates
another or different meaning or intent, the following rules
shall apply to the construction of this Agreement:
(a) Words importing the singular number shall include the
plural number and vice versa.
(b) The captions and headings herein are solely for
convenience of reference and shall not constitute a
part of this Agreement nor shall they affect its
meaning, construction or effect.
(c) The words "hereof," "herein," "hereto" 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 Statement provides that the Applicable Rate per
annum for each series of Preferred Shares for each
Dividend Period after the initial Dividend Period
with respect to each series of Preferred Shares
shall, except under certain conditions, be equal to
the rate per annum that a bank or trust
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company appointed by the Fund advises has resulted on
the Business Day preceding the first day of such
Dividend Period from implementation of the Auction
Procedures for such series. Each periodic operation
of the Auction Procedures is hereinafter referred to
as an "Auction." The Board of Trustees has adopted a
resolution appointing The Bank of New York as Auction
Agent for purposes of the Auction Procedures for each
series of the Preferred Shares. The Auction Agent
accepts such appointment and agrees to follow the
procedures set forth in this Section 2 and the
Auction Procedures for the purpose of determining the
Applicable Rate for each series of Preferred Shares
for each Dividend Period thereof for which the
Applicable Rate is to be determined by an Auction.
(b) All of the provisions contained in the Auction
Procedures and the Settlement Procedures are
incorporated herein by reference in their entirety
and shall be deemed to be a part hereof to the same
extent as if such provisions were fully set forth
herein.
2.2 Preparation of Each Auction; Maintenance of Registry of
Beneficial Owners.
(a) Not later than seven days prior to the first Auction
Date for any series of Preferred Shares, the Fund
shall provide the Auction Agent with a list of the
Broker-Dealers. Not later than seven days prior to
any Auction Date for any series of Preferred Shares
for which any change in such list of Broker-Dealers
is to be effective, the Fund will notify the Auction
Agent in writing of such change and, if any such
change involves the addition of a Broker-Dealer to
such list, shall cause to be delivered to the Auction
Agent for execution by the Auction Agent a
Broker-Dealer Agreement signed by such Broker-Dealer;
provided, however, that if the Fund proposes to
designate any Special Dividend Period of any series
of Preferred Shares pursuant to Section 4 of Part I
of the Statement, not later than 11:00 A.M., New York
City time, on the Business Day next preceding the
Auction next preceding the first day of such Special
Dividend Period, upon the written request of the
Auction Agent, the Fund shall provide the Auction
Agent with a list of the Broker-Dealers for such
series. The Auction Agent and the Fund shall have
entered into a Broker-Dealer Agreement with each
Broker-Dealer prior to the participation of any such
Broker-Dealer in any Auction.
(b) In the event that any Auction Date for any series of
Preferred Shares shall be changed after the Auction
Agent shall have given the notice referred to in
clause (vi) or (vii) of paragraph (a) of the
Settlement Procedures, or after the notice referred
to in Section 2.5(a) hereof, if applicable, the
Auction Agent, by such means as the Auction Agent
deems practicable, shall give notice of such change
to the Broker-Dealers for such series not later than
the earlier of 9:15 A.M. on the new Auction Date or
9:15 A.M. on the original Auction Date.
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(c) (i) The Auction Agent shall maintain a registry of
the beneficial owners of the shares of each series of
Preferred Shares who shall constitute Existing
Holders of shares of such series of Preferred Shares
for purposes of Auctions and shall indicate thereon
the identity of the respective Broker-Dealer of each
Existing Holder, if any, on whose behalf such
Broker-Dealer submitted the most recent Order in any
Auction which resulted in such Existing Holder
continuing to hold or purchasing shares of such
series of Preferred Shares. The Auction Agent shall
keep such registry current and accurate based on
information provided to it by Broker-Dealers. 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 Preferred Shares a list of
the initial Existing Holders of the shares of each
such series, the number of shares purchased by each
such Existing Holder and the respective Broker-Dealer
of each such Existing Holder or the affiliate thereof
through which each such Existing Holder purchased
such shares. The Auction Agent may rely upon, as
conclusive evidence of the identities of the Existing
Holders of shares of any series of Preferred Shares,
(A) such list, (B) the results of Auctions (C)
notices from any Broker-Dealer as described in the
first sentence of Section 2.2(c)(iii) hereof and (D)
the results of any procedures approved by the Fund
that have been devised for the purpose of determining
the identities of Existing Holders in situations
where shares of Preferred Shares may have been
transferred without compliance with any restriction
on the transfer thereof set forth in the Auction
Procedures.
(ii) In the event of any partial redemption of
any series of Preferred Shares, the Auction
Agent shall, at least two Business Days
prior to the next Auction for such series,
request each Broker-Dealer to provide the
Auction Agent with a list of Persons who
such Broker-Dealer believes should remain
Existing Holders after such redemption based
upon inquiries of those Persons such
Broker-Dealer believes are Beneficial Owners
as a result of the most recent Auction and
with respect to each such Person, the number
of shares of Preferred Shares of such series
such Broker-Dealer believes are owned by
such Person after such redemption. In the
absence of receiving any such information
from any Broker-Dealer, the Auction Agent
may continue to treat the Persons listed in
its registry of Existing Holders as the
beneficial owner of the number of shares of
Preferred Shares of such series shown in
such registry.
(iii) The Auction Agent shall be required to
register a transfer of shares of Preferred
Shares of any series from an Existing Holder
of such shares of Preferred Shares only if
such transfer is to another Existing Holder,
or other Person if permitted by the Fund,
and only if such transfer is made (A)
pursuant to an Auction, (B) the Auction
Agent has been notified in writing (I) in a
notice
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substantially in the form of Exhibit C to
the Broker-Dealer Agreements by a
Broker-Dealer of such transfer or (II) in a
notice substantially in the form of Exhibit
D to the Broker-Dealer Agreements by the
Broker-Dealer of any Existing Holder, or
other Person if permitted by the Fund, that
purchased or sold such shares of Preferred
Shares in an Auction of the failure of such
shares of Preferred Shares to be transferred
as a result of such Auction or (C) pursuant
to procedures approved by the Fund that have
been devised for the purpose of determining
the identities of Existing Holders in
situations where shares of Preferred Shares
may have been transferred without compliance
with any restriction on the transfer thereof
set forth in the Auction Procedures. The
Auction Agent is not required to accept any
such notice for an Auction unless it is
received by the Auction Agent by 3:00 P.M.
on the Business Day preceding such Auction.
(d) The Auction Agent may, but shall not be obligated to,
request the Broker-Dealers, as set forth in the
Broker-Dealer Agreements, to provide the Auction
Agent with a list of Persons who such Broker-Dealer
believes should be Existing Holders based upon
inquiries of those Persons such Broker-Dealer
believes are Beneficial Owners as a result of the
most recent Auction and with respect to each such
Person, the number of shares of such series of
Preferred Shares such Broker-Dealer believes to be
owned by such Person. The Auction Agent shall keep
confidential such registry of Existing Holders and
shall not disclose the identities of the Existing
Holders of such shares of Preferred Shares to any
Person other than the Fund and the Broker-Dealer that
provided such information; provided, however, that
the Auction Agent reserves the right and is
authorized to disclose any such information if (a) it
is ordered to do so by a court of competent
jurisdiction or a regulatory body, judicial or
quasi-judicial agency or authority having the
authority to compel such disclosure, (b) it is
advised by its counsel that its failure to do so
would be unlawful or (c) failure to do so would
expose the Auction Agent to loss, liability, claim,
damage or expense for which it has not received
indemnity or security satisfactory to it.
2.3 Information Concerning Rates.
(a) On each Auction Date, the Auction Agent shall
determine the AA Financial Commercial Paper Rate or
the Treasury Index Rate, as the case may be, and the
Maximum Rate. If the AA Financial Commercial Paper
Rate or the Treasury Index Rate, as the case may be,
is not quoted on an interest basis, if the rate
obtained by the Auction Agent is quoted on a discount
basis, or if the rate obtained by the Auction Agent
is quoted on another basis the Auction Agent shall
convert the quoted rate to an interest rate after
consultation with the Fund as to the method of such
conversion. Not later than 9:30 A.M. on each Auction
Date the Auction Agent shall
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notify the Fund and the Broker-Dealers of the Maximum
Rate so determined and the AA Financial Commercial
Paper Rate or the Treasury Index Rate, as the case
may be, used to make such determination.
(b) If any AA Financial 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 Financial Commercial Paper Rate, the Auction Agent
shall promptly notify the Fund so that the Fund can
determine whether to select a substitute Commercial
Paper Dealer or substitute Commercial Paper Dealers
to provide the quotation or quotations not being
supplied by any Commercial Paper Dealer or Commercial
Paper Dealers. The Fund shall promptly advise the
Auction Agent of any such selection.
(c) If any Treasury Index Rate is to be based on rates
supplied by U.S. Government Securities Dealers and
one or more of the U.S. Government Securities Dealers
shall not provide a quotation for the determination
of such Treasury Rate, the Auction Agent shall
promptly notify the Fund so that the Fund can
determine whether to select a Substitute U.S.
Government Securities Dealer or Substitute U.S.
Government Securities Dealers to provide the
quotation or quotations not being supplied by any
U.S. Government Securities Dealers. The Fund shall
promptly advise the Auction Agent of any such
selection.
(d) In the case of a Dividend Default, the Applicable
Rate for each Dividend Period commencing during a
Default Period will be equal to the Default Rate.
2.4 Auction Schedule. The Auction Agent shall conduct Auctions for
each series of Preferred Shares in accordance with the
schedule set forth below. Such schedule may be changed by the
Auction Agent with the consent of the Fund, which consent
shall not be unreasonably withheld or delayed. The Auction
Agent shall give written notice of any such change to each
Broker-Dealer. Such notice shall be given prior to the close
of business on the Business Day next preceding the first
Auction Date on which any such change shall be effective.
Time Event
------------------- ---------------------------------------
By 9:30 A.M. Auction Agent advises the Fund and Broker-Dealers
of the applicable Maximum Rate and the AA Financial
Commercial Paper Rate used in determining such
Maximum Rate as set forth in Section 2.3(a) hereof.
9:30 A.M. - 1:00 P.M. Auction Agent assembles information communicated
to it by Broker-Dealers as provided in Section 2(a)
of the Auction
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Time Event
------------------- ---------------------------------------
Procedures. Submission Deadline is 1:00 P.M.
Not earlier than 1:00 P.M. Auction Agent makes determinations pursuant to
Section 3(a) of the Auction Procedures.
By approximately 3:00 P.M. Auction Agent advises Fund of results of
Auction as provided in Section 3(b) of the Auction
Procedures. Submitted Bids and Submitted Sell
Orders are accepted and rejected and shares of
Preferred Shares allocated as provided in Section 4
of the Auction Procedures. Auction Agent gives
notice of Auction results as set forth in paragraph
(a) of the Settlement Procedures.
The Auction Agent shall follow the notification procedures set forth in
paragraph (a) of the Settlement Procedures.
2.5 Designation of Dividend Period.
(a) The Statement provides that the Fund will designate
the duration of subsequent Dividend Periods;
provided, however, that no such designation is
necessary for a Standard Dividend Period; provided,
however, that any designation of a Special Rate
Period shall be effective only if (i) notice thereof
shall have been given as provided herein, (ii) any
failure to pay in a timely manner to the Auction
Agent the full amount of any dividend on, or the
redemption price of, the Preferred Shares shall have
been cured, (iii) Sufficient Clearing Bids shall have
existed in an Auction held on the Auction Date
immediately preceding the first day of such proposed
Dividend Period other than a Standard Dividend
Period, and (iv) if the Fund shall have mailed a
Notice of Redemption with respect to any shares, the
Redemption Price with respect to such shares shall
have been deposited with the Paying Agent.
(b) Pursuant to the Statement, the Fund may, at its
option, designate a Special Dividend Period for any
series of Preferred Shares in the manner described
7
below and in Section 4 of Part I of the Statement. If
the Fund proposes to designate any succeeding Special
Dividend Period the Fund shall deliver to the Auction
Agent:
(i) A notice of such proposed Special Dividend
Period in the form of Exhibit D hereto not
less than 7 (or 2 in the event the duration
of the Dividend Period is fewer than 8 days)
nor more than 30 Business Days prior to the
first day of such proposed Special Dividend
Period. The Auction Agent on behalf of the
Fund shall deliver such notice by First
Class Mail or by facsimile to each Existing
Holder of shares of such series of Preferred
Shares at the address or facsimile number
set forth for such Existing Holder in the
records of the Auction Agent and to the
Broker-Dealers for such series as promptly
as practicable after its receipt of such
notice from the Fund.
(ii) A notice in the form of Exhibit E or F
hereto not later than 11:00 A.M. on the
second Business Day next preceding the first
day of such proposed Special Dividend
Period, of either (x) its determination,
subject to certain conditions, to proceed
with such Special Dividend Period, in which
case the Fund shall specify the terms of the
Specific Redemption Provisions, if any, or
(y) its determination not to proceed with
such Special Dividend Period in which latter
event the succeeding Dividend Period shall
be a Standard Dividend Period. The Auction
Agent shall promptly deliver such notice to
the Broker-Dealers, but in no event later
than 3:00 P.M. on the date of such notice.
(iii) If the Fund fails to deliver either such
notice with respect to any designation of
any proposed Special Dividend Period to the
Auction Agent by 11:00 A.M., New York City
time, on the second Business Day next
preceding the first day of such proposed
Special Dividend Period, the Fund shall be
deemed to have delivered a notice to the
Auction Agent with respect to such Dividend
Period to the effect that it has determined
not to proceed with the designation of a
Special Dividend Period, thereby resulting
in a Standard Dividend Period.
2.6 Notice of Auction Results. On each Auction Date for any series
of Preferred Shares, the Auction Agent shall notify
Broker-Dealers of the results of the Auction held on such date
by telephone (or by other electronic means acceptable to the
parties) as set forth in paragraph (a) of the Settlement
Procedures.
2.7 Broker-Dealers.
(a) Not later than 12:00 Noon on each Auction Date for
any series of Preferred Shares, the Fund shall pay to
the Auction Agent an amount in cash equal to the
aggregate fees payable to the Broker-Dealers for such
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series pursuant to Section 2.6 of the Broker-Dealer
Agreement for such series. The Auction Agent shall
apply such moneys as set forth in Section 2.6 of each
such Broker-Dealer Agreement.
(b) The Fund shall obtain the consent of the Auction
Agent prior to selecting any Person to act as a
Broker-Dealer, which consent shall not be
unreasonably withheld.
(c) The Auction Agent shall terminate any Broker-Dealer
Agreement as set forth therein if so directed in
writing by the Fund.
(d) Subject to the Auction Agent's having consented to
the selection of the relevant Broker-Dealer pursuant
to Section 2.7(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 Preferred
Shares to which such Broker-Dealer Agreement relates.
2.8 Ownership of Preferred Shares. The Fund shall notify the
Auction Agent if the Fund or any affiliate of the Fund
acquires any shares of Preferred Shares of any series. Neither
the Fund nor any affiliate of the Fund shall submit any Order
in any Auction for Preferred Shares, except as set forth in
the next sentence. Any Broker-Dealer that is an affiliate of
the Fund may submit Orders in Auctions, but only if such
Orders are not for its own account. For purposes of this
Section 2.8, a Broker-Dealer shall not be deemed to be an
affiliate of the Fund solely because one or more of the
directors or executive officers of such Broker-Dealer or of
any Person controlled by, in control of or under common
control with such Broker-Dealer is also a Trustee of the Fund.
The Auction Agent shall have no duty or liability with respect
to enforcement of this Section 2.8.
2.9 Access to and Maintenance of Auction Records. The Auction
Agent shall, upon the receipt of prior written notice from the
Fund, afford to the Fund, at no cost to the Auction Agent,
access at reasonable times during normal business hours to all
books, records, documents and other information concerning the
conduct and results of Auctions. The Auction Agent shall
maintain records relating to an Auction for a period of six
years after such Auction and such records shall, in reasonable
detail, accurately and fairly reflect the actions taken by the
Auction Agent hereunder.
2.10 Dividend and Redemption Price Deposit. The Fund shall pay to
the Auction Agent, not later than 12:00 noon, New York City
time, on each Dividend Payment Date for any series of
Preferred Shares, an aggregate amount of immediately available
funds equal to the dividends to be paid on such Dividend
Payment Date. The Fund will deposit with the Auction Agent
funds sufficient to redeem the specified number of Preferred
Shares with respect to a redemption required under
subparagraph (a)(ii) of Section 3 of the Statement, by 1:00
P.M., New York City
9
time, of the Business Day immediately preceding the Mandatory
Redemption Date.
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 Preferred Shares of any series (i) on each
Dividend Payment Date for such series, dividends on the shares of Preferred
Shares of such series, (ii) on any date fixed for redemption of shares of
Preferred Shares of any series, the Redemption Price of any shares of such
series called for redemption and (iii) any late charge related to any payment of
dividends or Redemption Price, in each case after receipt of the necessary funds
from the Fund with which to pay such dividends, Redemption Price or late charge.
The amount of dividends for any Dividend Period for any series of Preferred
Shares to be paid by the Auction Agent to the Holders of such shares of such
series will be determined by the Fund as set forth in Section 2 of Part I of the
Statement with respect to such series. The Redemption Price of any shares to be
paid by the Auction Agent to the Holders will be determined by the Fund as set
forth in Section 3 of Part I of the Statement with respect to such series. The
Fund shall notify the Auction Agent in writing of a decision to redeem shares of
any series of Preferred Shares as provided in paragraph (b) of Section 3 of Part
I of the Statement. Such notice by the Fund to the Auction Agent shall contain
the information required by paragraph (b) of Section 3 of Part I of the
Statement to be stated in the notice of redemption required to be mailed by the
Auction Agent to such Holders.
4. The Auction Agent as Transfer Agent and Registrar
4.1 Issue of Share Certificates. Upon the Date of Original Issue
of each series of Preferred Shares, one certificate
representing all of the shares of each series issued on such
date shall be issued by the Fund and, at the request of the
Fund, registered in the name of Cede & Co. and countersigned
by the Auction Agent.
4.2 Registration of Transfer of Shares. Shares of each series of
Preferred Shares shall be registered solely in the name of the
Securities Depository or its nominee.
4.3 Removal of Legend on Restricted Shares. All requests for
removal of legends on shares of any series of Preferred Shares
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 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
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Section 4.4 shall be deemed to be a representation and
warranty by the Fund to the Auction Agent that such issuance
will comply with such provisions of law and the By-Laws and
resolutions of the Fund.
4.5 Disposition of Canceled Certificates; Record Retention. The
Auction Agent shall retain all share certificates which have
been cancelled in transfer or exchange and all accompanying
documentation in accordance with applicable rules and
regulations of the Securities and Exchange Commission for two
calendar years. The Fund also shall undertake to furnish to
the Securities and Exchange Commission and to the Board of
Governors of the Federal Reserve System, upon demand, at
either the principal office or at any regional office,
complete, correct and current hard copies of any and all such
records. Thereafter such records shall not be destroyed by the
Fund without the concurrence of the Auction Agent.
4.6 Share Transfer Books. For so long as the Auction Agent is
acting as the transfer agent for any series of Preferred
Shares pursuant to this Agreement, it shall maintain a share
transfer book containing a list of the Holders of the shares
of each series of Preferred Shares, the number of shares of
each series held by such Holders and the address of each
Holder based upon information provided to it by
Broker-Dealers. 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; provided, however,
that the Auction Agent, in its capacity as transfer agent,
reserves the right and is authorized to disclose any such
information if (a) it is ordered to do so by a court of
competent jurisdiction or a regulatory body, judicial or
quasi-judicial agency or authority having the authority to
compel such disclosure, (b) it is advised by its counsel that
its failure to do so would be unlawful or (c) failure to do so
would expose the Auction Agent to loss, liability, claim,
damage or expense for which it has not received indemnity or
security satisfactory to it.
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 Preferred Shares of any
series, that remain unpaid after 90 days shall be repaid to
the Fund upon the written request of the Fund.
5. Representations and Warranties of the Fund
The Fund represents and warrants to the Auction Agent that:
(a) the Fund is a duly organized and existing business
trust in good standing under the laws of the State of
Delaware and has full corporate power or all
requisite power to execute and deliver the Agreement
and to authorize, create and issue the shares of
Preferred Shares of each series and the
11
shares of Preferred Shares of each series when
issued, will be duly authorized, validly issued,
fully paid and nonassessable;
(b) the Agreement has been duly and validly authorized,
executed and delivered by the Fund and constitutes
the legal, valid and binding obligation of the Fund;
(c) the form of the certificate evidencing the shares of
Preferred Shares of each series complies or will
comply with all applicable laws of the State of
Delaware;
(d) when issued, the shares of Preferred Shares of each
series will have been duly registered under the
Securities Act of 1933, as amended, and no further
action by or before any governmental body or
authority of the United States or of any state
thereof is required in connection with the execution
and delivery of the Agreement or will have been
required in connection with the issuance of the
shares of Preferred Shares of each series; and
(e) the execution and delivery of the Agreement and the
issuance and delivery of the shares of Preferred
Shares of each series do not and will not conflict
with, violate or result in a breach of, the terms,
conditions or provisions of, or constitute a default
under, the Agreement and Declaration of Trust (as
amended by one or more Statements) or the By-Laws of
the Fund, any law or regulation, any order or decree
of any court or public authority having jurisdiction,
or any mortgage, indenture, contract, agreement or
undertaking to which the Fund is a party or by which
it is bound the effect of which conflict, violation,
default or breach would be material to the Fund or
the Fund and its subsidiaries taken as a whole.
6. The Auction Agent
6.1 Duties and Responsibilities.
(a) The Auction Agent is acting solely as non-fiduciary
agent for the Fund hereunder and owes no duties,
fiduciary or otherwise, to any other Person by reason
of this Agreement.
(b) The Auction Agent undertakes to perform such duties
and only such duties as are specifically set forth in
this Agreement and the Broker-Dealer Agreements, and
no implied covenants or obligations shall be read
into this Agreement against the Auction Agent.
(c) In the absence of willful misconduct or 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
12
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 Preferred
Shares of any series, that remain with the Auction
Agent after 90 days shall be repaid to the Fund as
provided in Section 4.7 hereof.
6.2 Rights of the Auction Agent.
(a) The Auction Agent may conclusively rely and shall be
protected in acting or refraining from acting upon
any communication authorized hereby and upon any
written instruction, notice, request, direction,
consent, report, certificate, share certificate or
other instrument, paper or document believed in good
faith by it to be genuine. The Auction Agent shall
not be liable for acting upon any telephone
communication authorized hereby which the Auction
Agent believes in good faith to have been given by
the Fund or by any Broker-Dealer. The Auction Agent
may record telephone communications with the Fund or
with any Broker-Dealer.
(b) The Auction Agent may consult with counsel and the
reasonable advice of such counsel shall be full and
complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon.
(c) The Auction Agent shall not be required to advance,
expend or risk its own funds or otherwise incur or
become exposed to financial liability in the
performance of its duties hereunder.
(d) The Auction Agent may perform its duties and exercise
its rights hereunder either directly or by or through
agents or attorneys and shall not be responsible for
any misconduct or negligence on the part of any agent
or attorney appointed by it with due care hereunder.
(e) The Auction Agent shall not be responsible or liable
for any failure or delay in the performance of its
obligations under this agreement arising out of or
caused, directly or indirectly, by circumstances
beyond its reasonable control, including, without
limitation, acts of God; earthquakes; fires, floods;
wars; civil or military disturbances; sabotage; act
of terrorism; epidemics; riots; interruptions, loss
or malfunctions of utilities; computer (hardware or
software) or communications services; accidents;
labor disputes; acts of civil or military authority
or governmental actions; it being understood that the
Auction Agent shall use reasonable efforts which are
consistent with accepted practices in the banking
industry to resume performance as soon as practicable
under the circumstances.
13
(f) In no event shall the Auction Agent be responsible or
liable for special, indirect or consequential loss or
damage of any kind whatsoever (including, but not
limited to, loss of profit), even if the Auction
Agent has been advised of the likelihood of such loss
or damage and regardless of the form of action.
6.3 Auction Agent's Disclaimer. The Auction Agent makes no
representation as to the validity or adequacy of this
Agreement (except as to the Auction Agent's duties hereunder
and that the Auction Agent hereby represents that this
Agreement has been duly authorized, executed and delivered by
the Auction Agent and (if and when signed and delivered by the
Fund) constitutes a legal and binding obligation of the
Auction Agent), the Preferred Shares, or any other document
related to the Preferred Shares.
6.4 Compensation, Expenses and Indemnification.
(a) The Fund shall pay the Auction Agent from time to
time reasonable compensation for all services
rendered by it under this Agreement and the
Broker-Dealer Agreement in such amounts as may be
agreed to by the Fund and the Auction Agent from time
to time.
(b) The Fund shall reimburse the Auction Agent upon its
request for all reasonable out-of-pocket expenses,
disbursements and advances incurred or made by the
Auction Agent in accordance with any provision of
this Agreement and the Broker-Dealer Agreements
(including the reasonable compensation and the
expenses and disbursements of its agents and
counsel), except any expense or disbursement
attributable to its gross negligence or willful
misconduct.
(c) The Fund shall indemnify the Auction Agent for and
hold it harmless against, any loss, liability or
expense incurred without gross negligence or willful
misconduct on its part, arising out of or in
connection with its agency under this Agreement and
the Broker-Dealer Agreements, including the costs and
expenses of defending itself against any claim or
liability in connection with its exercise or
performance of its duties hereunder and thereunder.
7. Miscellaneous
7.1 Term of Agreement.
(a) The term of this Agreement is unlimited unless it
shall be terminated as provided in this Section 7.1.
The Fund may terminate this Agreement any time by so
notifying the Auction Agent, provided that the Fund
has entered into an agreement in substantially the
form of this Agreement with a successor auction
agent. The Auction Agent may terminate this Agreement
upon written notice to the Fund, such termination to
be effective on the earlier of (i) the date specified
in such notice which shall not be earlier than 45
days after the giving of such notice or (ii) the date
on
14
which a successor Auction Agent is appointed by the
Fund pursuant to an agreement containing
substantially the same terms and conditions as this
Agreement.
(b) Except as otherwise provided in this paragraph (b),
the respective rights and duties of the Fund and the
Auction Agent under this Agreement shall cease upon
termination of this Agreement. The Fund's obligations
under Section 6.4 hereof and its representations and
warranties contained in Section 5 hereof and the
Auction Agent's obligations and liabilities under
Sections 2.9 and 4.5 hereof shall survive the
termination hereof with respect to any Series of
Preferred Shares. Upon termination of this Agreement,
the Auction Agent shall, at the Fund's request,
promptly deliver to the Fund copies of all books and
records maintained by it in connection with its
duties hereunder.
7.2 Force Majeure. Neither party to this Agreement shall be
responsible or liable for any failure or delay in the
performance of its obligations under this Agreement arising
out of or caused, directly or indirectly, by circumstances
beyond its reasonable control, including, without limitation,
acts of God; earthquakes; fires; floods; wars; civil or
military disturbances; sabotage; epidemics; riots;
interruptions, loss or malfunctions or utilities; computer
(hardware or software) or communications services; accidents;
labor disputes; acts of civil or military authority or
governmental actions; it being understood that the parties
shall use reasonable efforts which are consistent with
accepted practices in the banking industry to resume
performance as soon as practicable under the circumstances.
7.3 Communications. Except for (a) communications authorized to be
by telephone pursuant to this Agreement or the Auction
Procedures and (b) communications in connection with Auctions
(other than those expressly required to be in writing) and
unless otherwise specified by the terms of this Agreement, all
notices, requests and other communications to any party
hereunder shall be in writing (including telecopy or similar
writing) given to such person at its address or telecopy
number set forth below:
If to the Fund, addressed:
[Name of Fund]
0000 Xxxx Xxxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxx, Xx.
Telephone No.: (000) 000-0000
If to the Auction Agent, to the address or telecopy number set
forth in the Request and Acceptance Letter.
15
or to such other address as the party to whom the communication is addressed
shall have previously communicated in writing 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.
7.4 Entire Agreement. This Agreement contains the entire agreement
among the parties relating to the subject matter hereof, and
there are no other representations, endorsements, promises,
agreements or understandings, oral, written or inferred,
between the parties relating to the subject matter hereof
except for agreements relating to compensation of the Auction
Agent. This Agreement supersedes all prior agreements between
the parties relating to the subject matter of this Agreement.
7.5 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.
7.6 Amendment; Waiver.
(a) This Agreement shall not be deemed or construed to be
modified, amended, rescinded, cancelled or waived, in
whole or in part, except by a written instrument
signed by a duly authorized representative of the
party to be charged.
(b) Failure of either party hereto to exercise any right
or remedy hereunder in the event of a breach hereof
by the other party shall not constitute a waiver of
any such rights or remedies with respect to any
subsequent breach.
7.7 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.
7.8 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.
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.
16
EXHIBIT A
BROKER-DEALER AGREEMENT
[INTENTIONALLY OMITTED]
A-1
EXHIBIT B
SETTLEMENT PROCEDURES
[INTENTIONALLY OMITTED]
B-1
EXHIBIT C
[NAME OF FUND]
NOTICE OF AUCTION DATE FOR PREFERRED SHARES ("Preferred Shares")
NOTICE IS HEREBY GIVEN that the Auction Date of the next Auction for
the Preferred Shares Series ___ of the [Name of Fund] (the "Fund") is scheduled
to be ____________ and the next Dividend Payment Date for Series ____ of the
Fund's Preferred Shares will be _______________.
Dated: [Name of Fund]
-----------------
C-1
EXHIBIT D
[NAME OF FUND]
NOTICE OF PROPOSED DESIGNATION OF
SPECIAL DIVIDEND PERIOD FOR
PREFERRED SHARES ("Preferred Shares")
NOTICE IS HEREBY GIVEN that [Name of Fund] (the "Fund") proposes to
exercise its option to designate the Dividend Period of its Series __ Preferred
Shares commencing [the first day of the proposed Special Dividend Period] and
ending [the last day of the proposed Special Dividend Period] as a Special
Dividend Period and the Maximum Rate for such Special Dividend Period is
proposed to be ___________.
By 3:00 P.M., New York City time, on the second Business Day next
preceding the first day of such proposed Special Dividend Period, the Fund will
notify the Auction Agent for the Preferred Shares 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, or
(b) its determination not to exercise such option.
Dated: [Name of Fund]
---------------------
D-1
EXHIBIT E
[NAME OF FUND]
NOTICE OF DESIGNATION OF SPECIAL DIVIDEND PERIOD OF
PREFERRED SHARES ("Preferred Shares")
NOTICE IS HEREBY GIVEN that [Name of Fund] (the "Fund") has determined
to designate the Dividend Period of its Series __ Preferred Shares commencing on
[the first day of the Special Dividend Period] and ending on [the last 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].
The scheduled Dividend Payment Dates for such series of Preferred
Shares during such Special Dividend Period will be ____________________.
[Specific Redemption Provisions, if applicable.]
[The Special Dividend Period shall not commence if on such Auction Date
Sufficient Clearing Bids shall not exist.]
Dated: [Name of Fund]
-----------------------
E-1
EXHIBIT F
[NAME OF FUND]
NOTICE OF DETERMINATION NOT TO DESIGNATE
SPECIAL DIVIDEND PERIOD OF
PREFERRED SHARES ("Preferred Shares")
NOTICE IS HEREBY GIVEN that [Name of Fund] (the "Fund") has determined not to
exercise its option to designate a Special Dividend Period of its Series __
Preferred Shares Accordingly, the next succeeding Dividend Period of such series
will be a Standard Dividend Period.
Dated: [Name of Fund]
-----------------
F-1
