EXHIBIT k.3
NUVEEN AUCTION AGENCY AGREEMENT
Basic Terms for Acting as Auction Agent
Relating to
FUNDNOTES(TM)
April ___, 2004
TABLE OF CONTENTS
PAGE
1. DEFINITIONS AND RULES OF CONSTRUCTION............................................................ 1
1.1 Terms Defined by Reference to Indenture.............................................. 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 Rate Period........................................................... 7
2.6 Notice of Auction Results............................................................ 8
2.7 Broker-Dealers....................................................................... 9
2.8 Ownership of FundNotes............................................................... 9
2.9 Access to and Maintenance of Auction Records......................................... 9
3. REPRESENTATIONS AND WARRANTIES OF THE FUND....................................................... 9
4. THE AUCTION AGENT................................................................................ 10
4.1 Duties and Responsibilities.......................................................... 10
4.2 Rights of the Auction Agent.......................................................... 11
4.3 Auction Agent's Disclaimer........................................................... 12
4.4 Compensation, Expenses and Indemnification........................................... 12
5. MISCELLANEOUS.................................................................................... 12
5.1 Term of Agreement.................................................................... 12
5.2 Communications....................................................................... 13
5.3 Entire Agreement..................................................................... 13
5.4 Benefits............................................................................. 14
5.5 Amendment; Waiver.................................................................... 14
5.6 Successors and Assigns............................................................... 14
5.7 Severability......................................................................... 14
5.8 Execution in Counterparts............................................................ 14
5.9 Governing Law........................................................................ 14
5.10 Declaration of Trust................................................................. 14
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 Rate Period
EXHIBIT E - Form of Notice of Designation of Special Rate Period
EXHIBIT F - Form of Notice of Determination Not to Designate Special Rate Period
ii
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 FundNotes
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 Nuveen Institutional Advisory Corp. is the investment
adviser.
The Fund proposes to issue FundNotes pursuant to the terms of an
Indenture of Trust dated as of ________, 2004 between the Fund and The Bank of
New York, as Trustee (as the same may be amended or supplemented from time to
time, the "Indenture"). The Fund desires that the Auction Agent perform certain
duties in connection with the FundNotes upon the terms and subject to the
conditions of the Agreement.
1. Definitions and Rules of Construction
1.1 Terms Defined by Reference to Indenture. Capitalized terms not
defined herein shall have the respective meanings specified in
the Indenture.
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 Nuveen Institutional Advisory
Corp.
(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 FundNotes.
(d) "Auction" shall have the meaning specified in Section
2.1 hereof.
(e) "Auction Procedures" shall mean the auction
procedures constituting Appendix A to the Indenture.
(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 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 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.
(i) "FundNotes" shall mean the notes, of the Fund
designated in the Indenture as its "FundNotes" 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.
(j) "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.
(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 FundNotes.
(l) "Settlement Procedures" shall mean the Settlement
Procedures attached hereto as Exhibit B.
1.3 Rules of Construction. Unless the context or use indicates
another or different meaning or intent, the following rules
shall apply to the construction of this Agreement:
(a) Words importing the singular number shall include the
plural number and vice versa.
(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," "hereby,"
"hereunder," 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 Indenture provides that the Applicable Rate per
annum for each series of FundNotes for each Rate
Period after the initial Rate Period with respect to
each series of FundNotes shall, except under certain
conditions, be equal to the rate per annum that a
bank or trust company appointed by
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the Fund advises has resulted on the Business Day
preceding the first day of such Rate 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 FundNotes. 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 FundNotes for each
Rate 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 FundNotes, 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 FundNotes 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 Rate Period of any series of
FundNotes pursuant to the provisions of the
Indenture, 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 Rate
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
FundNotes 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 FundNotes of each series
who shall constitute Existing Holders of FundNotes of
such series 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 such
series of FundNotes. 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 FundNotes a list of the initial Existing
Holders of the FundNotes of each such series, the
principal amount of FundNotes 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 FundNotes. The Auction Agent shall advise the
Fund as to whether the number of Existing Holders is
500 or more or any Existing Holder owns 5% or more of
the outstanding principal amount of FundNotes of any
series. The Auction Agent may rely upon, as
conclusive evidence of the identities of the Existing
Holders of FundNotes of any series, (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 FundNotes 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 FundNotes, 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
principal amount of FundNotes 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 principal amount of
FundNotes of such series shown in such
registry.
(iii) The Auction Agent shall be required to
register a transfer of FundNotes of any
series from an Existing Holder of such
FundNotes 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 substantially in the
form of
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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 FundNotes in an
Auction of the failure of such FundNotes 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
FundNotes 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 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 principal amount of FundNotes
of such series 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 FundNotes 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 Composite Commercial Paper Rate or
the Treasury Index Rate, as the case may be, and the
Minimum Rate and Maximum Rate. If the AA Composite
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 notify
the Fund and the Broker-Dealers of the Minimum Rate
and Maximum Rate so determined and the AA
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Composite Commercial Paper Rate or the Treasury Index
Rate, as the case may be, used to make such
determination.
(b) 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 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.
2.4 Auction Schedule. The Auction Agent shall conduct Auctions for
each series of FundNotes 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.
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Time Event
---- -----
By 9:30 A.M. Auction Agent advises the Fund and
Broker-Dealers of the applicable Minimum
Rate and Maximum Rate and the Reference
Rate(s) used in determining such Minimum
Rate and Maximum Rate as set forth in
Section 2.3(a) hereof.
9:30 A.M. - 12:30 P.M. Auction Agent assembles information
communicated to it by Broker-Dealers as
provided in Section 2(a) of the Auction
Procedures. Submission Deadline is 1:00 P.M.
Not earlier than 12:30 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 principal amount
of FundNotes 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 Rate Period.
(a) The Indenture provides that the Fund will designate
the duration of subsequent Rate Periods; provided,
however, that no such designation is necessary for a
Standard Rate 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 interest on, or the redemption price of, the
FundNotes 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 Rate Period other than a
Standard Rate Period, (iv) if the Fund shall have
mailed a Notice of Redemption with respect to any
FundNotes, the Redemption Price with respect to such
FundNotes shall have been deposited with the Paying
Agent, and (v) in the case of the designation of a
Special Rate Period, as of the Auction Date next
preceding the first day of such Special Rate Period
it has Eligible Assets with an aggregate Discounted
Value at least equal to the FundNotes Basic
Maintenance Amount and the Fund has consulted with
the Broker-Dealers and has
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provided notice of each designation and a FundNotes
Basic Maintenance Report to Moody's (if Xxxxx'x is
then rating the FundNotes), Fitch (if Fitch is then
rating the FundNotes) and any Other Rating Agency
which is then rating the FundNotes and so requires.
(b) Pursuant to the Indenture, the Fund may, at its
option, designate a Special Rate Period for any
series of FundNotes in the manner described below and
in the Indenture. If the Fund proposes to designate
any succeeding Special Rate Period the Fund shall
deliver to the Auction Agent:
(i) A notice of such proposed Special Rate
Period in the form of Exhibit D hereto not
less than 7 (or 2 in the event the duration
of the Rate Period is fewer than 8 days) nor
more than 30 Business Days prior to the
first day of such proposed Special Rate
Period. The Auction Agent on behalf of the
Fund shall deliver such notice by any
electronic means acceptable to Existing
Holders to each Existing Holder of FundNotes
of such series at the address 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 2:30 P.M. on the
second Business Day next preceding the first
day of such proposed Special Rate Period, of
either (x) its determination, subject to
certain conditions, to proceed with such
Special Rate 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 Rate Period in which latter event
the succeeding Rate Period shall be a
Standard Rate 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 Rate Period to the
Auction Agent by 2:30 P.M., New York City
time, on the second Business Day next
preceding the first day of such proposed
Special Rate Period, the Fund shall be
deemed to have delivered a notice to the
Auction Agent with respect to such Rate
Period to the effect that it has determined
not to proceed with the designation of a
Special Rate Period, thereby resulting in a
Standard Rate Period.
2.6 Notice of Auction Results. On each Auction Date for any series
of FundNotes, the Auction Agent shall notify Broker-Dealers of
the results of the Auction held on such date by telephone as
set forth in paragraph (a) of the Settlement Procedures.
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2.7 Broker-Dealers.
(a) Not later than 12:00 Noon on each Auction Date for
any series of FundNotes, 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 2.6 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 by the
Fund.
(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 FundNotes to
which such Broker-Dealer Agreement relates.
2.8 Ownership of FundNotes. The Fund shall notify the Auction
Agent if the Fund or any affiliate of the Fund acquires any
FundNotes of any series. Neither the Fund nor any affiliate of
the Fund shall submit any Order in any Auction for FundNotes,
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
Director 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 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.
3. Representations and Warranties of the Fund
The Fund represents and warrants to the Auction Agent that:
9
(a) the Fund is a duly organized and existing business
trust in good standing under the laws of the State of
Massachusetts and has full corporate power or all
requisite power to execute and deliver the Agreement
and to authorize, create and issue the FundNotes of
each series and the FundNotes 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 FundNotes
of each series complies or will comply with all
applicable laws of the State of Massachusetts;
(d) when issued, the FundNotes 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 FundNotes of each series;
and
(e) the execution and delivery of the Agreement and the
issuance and delivery of the FundNotes 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 Declaration of
Trust (as amended by one or more Indentures) 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.
4. The Auction Agent
4.1 Duties and Responsibilities.
(a) The Auction Agent is acting solely as 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 negligence on
its part, the Auction Agent shall not be liable for
any action taken, suffered, or omitted or for
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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 negligent in ascertaining the
pertinent facts.
(d) Any funds deposited with the Auction Agent hereunder
by the Fund for any reason, that remain with the
Auction Agent after 90 days shall be repaid to the
Fund upon written request of the Fund, together with
interest, if any, earned thereon.
4.2 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 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).
(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; acts
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
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banking industry to resume performance as soon as
practicable under the circumstances.
4.3 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 constitutes a legal and binding
obligation of the Auction Agent), the FundNotes, or any other
document related to the FundNotes.
4.4 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 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 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.
5. Miscellaneous
5.1 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 which a successor Auction Agent is appointed by
the Fund pursuant to an agreement containing
substantially the same terms and conditions as this
Agreement.
12
(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
Section 2.9 hereof shall survive the termination
hereof with respect to any Series of FundNotes. 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.
5.2 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]
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx
Telephone No.: (000) 000-0000
If to the Auction Agent, to the address or telecopy number set
forth in the Request and Acceptance Letter.
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.
5.3 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.
13
5.4 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.
5.5 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.
(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.
5.6 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.
5.7 Severability. If any clause, provision or section hereof shall
be ruled invalid or unenforceable by any court of competent
jurisdiction, the invalidity or unenforceability of such
clause, provision or section shall not affect any of the
remaining clauses, provisions or sections hereof.
5.8 Execution in Counterparts. This Agreement may be executed in
several counterparts, each of which shall be an original and
all of which shall constitute but one and the same instrument.
5.9 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New
York.
5.10 Declaration of Trust. The Fund's Declaration is on file with
the Secretary of State of the Commonwealth of Massachusetts.
This Agreement has been executed on behalf of the Fund by the
Vice President and Treasurer of the Fund acting in such
capacity and not individually, and the obligations of the Fund
set forth in this Agreement are not binding upon any of the
Fund's trustees, officers or shareholders individually, but
are binding only upon the assets and property of the Fund.
14
EXHIBIT A
BROKER-DEALER AGREEMENT
A-1
EXHIBIT B
SETTLEMENT PROCEDURES
B-1
EXHIBIT C
[NAME OF FUND]
NOTICE OF AUCTION DATE FOR
FUNDNOTES ("FundNotes")
NOTICE IS HEREBY GIVEN that the Auction Date of the next Auction for
the FundNotes Series ___ of the [Name of Fund] (the "Fund") is scheduled to be
____________ and the next Interest Payment Date for Series ____ of the Fund's
FundNotes will be _______________.
Dated:____________________ [Name of Fund]
C-1
EXHIBIT D
[NAME OF FUND]
NOTICE OF PROPOSED DESIGNATION OF
SPECIAL RATE PERIOD FOR
FUNDNOTES ("FundNotes")
NOTICE IS HEREBY GIVEN that [Name of Fund] (the "Fund") proposes to
exercise its option to designate the Rate Period of its Series __ FundNotes
commencing [the first day of the proposed Special Rate Period] and ending [the
last day of the proposed Special Rate Period] as a Special Rate Period.
By 9:00 A.M., New York City time, on the Business Day next preceding
the first day of such proposed Special Rate Period, the Fund will notify the
Auction Agent for the FundNotes of either (a) its determination to exercise such
option, designating the length of such Special Rate 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 RATE PERIOD OF
FUNDNOTES ("FundNotes")
NOTICE IS HEREBY GIVEN that [Name of Fund] (the "Fund") has determined
to designate the Rate Period of its Series __ FundNotes commencing on [the first
day of the Special Rate Period] and ending on (the last day of the Special Rate
Period] as a Special Rate Period.
The Special Rate Period will be _____ [days] year(s]].
The Auction Date for the Special Rate Period is (the Business Day next
preceding the first day of such Special Rate Period].
The scheduled Interest Payment Dates for such series of FundNotes
during such Special Rate Period will be ____________________.
[Specific Redemption Provisions, if applicable.]
[The Special Rate 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 RATE PERIOD OF
FUNDNOTES ("FundNotes")
NOTICE IS HEREBY GIVEN that [Name of Fund] (the "Fund") has determined not to
exercise its option to designate a Special Rate Period of its Series __
FundNotes. Accordingly, the next succeeding Rate Period of such series will be a
Standard Rate Period.
Dated:_________________ [Name of Fund]
F-1
