EXHIBIT 13(b)
--------------------------------------------------------------------------------
AUCTION AGENCY AGREEMENT
between
VAN XXXXXX XXXXXXX MUNICIPAL TRUST
and
BANKERS TRUST COMPANY
Dated as of December 10, 1991
Relating to
Auction Preferred Shares, Series A, B, C and D
of
VAN XXXXXX XXXXXXX MUNICIPAL TRUST
--------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
SECTION 1 DEFINITIONS AND RULES OF CONSTRUCTION..........................................................1
1.1 Terms Defined by Reference to
APS Provisions......................................................................1
1.2 Terms Defined Herein..................................................................1
1.3 Rules of Construction.................................................................3
SECTION 2 THE AUCTION....................................................................................3
2.1 Purpose; Incorporation by Reference of Auction
Procedures and Settlement Procedures................................................3
2.2 Preparation of Each Auction; Maintenance of
Registry of Beneficial Owners.......................................................4
2.3 Information Concerninq Rates..........................................................7
2.4 Auction Schedule......................................................................11
2.5 Designation of Special Dividend Period................................................12
2.6 Allocation of Taxable Income..........................................................14
2.7 Failure to Deposit....................................................................15
2.8 Broker-Dealers........................................................................17
2.9 Ownership of Shares of APS............................................................18
2.10 Access to and Maintenance of
Auction Records.....................................................................18
2.11 Dividend and Redemption Price Deposit.................................................19
SECTION 3 THE AUCTION AGENT AS DIVIDEND
AND REDEMPTION PRICE DISBURSING AGENT........................................................19
SECTION 4 THE AUCTION AGENT AS TRANSFER AGENT
AND REGISTRAR................................................................................20
4.1 Issue Of Share Certificates...........................................................20
i
4.2 Registration of Transfer of Shares....................................................20
4.3 Removal of Legend on Restricted Shares................................................20
4.4 Lost Share Certificates...............................................................20
4.5 Disposition of Cancelled
Certificates; Record Retention......................................................20
4.6 Share Transfer Books..................................................................21
4.7 Return of Funds.......................................................................21
SECTION 5 REPRESENTATIONS AND WARRANTIES OF THE FUND.....................................................21
SECTION 6 THE AUCTION AGENT..............................................................................23
6.1 Duties and Responsibilities...........................................................23
6.2 Rights of the Auction Agent...........................................................23
6.3 Auction Agent's Disclaimer............................................................24
6.4 Compensation, Expenses and
Indemnification.....................................................................24
SECTION 7 MISCELLANEOUS..................................................................................25
7.1 Term of Agreement.....................................................................25
7.2 Communications........................................................................25
7.3 Entire Agreement......................................................................26
7.4 Benefits..............................................................................27
7.5 Amendment; Waiver.....................................................................27
7.6 Successors and Assigns................................................................27
7.7 Limitation of Liability...............................................................27
7.8 Severability..........................................................................27
7.9 Execution in Counterparts.............................................................27
7.10 Governing Law.........................................................................28
ii
EXHIBITS
EXHIBIT A - Broker-Dealer Agreement
EXHIBIT B - Form of Master Purchaser's Letter
EXHIBIT C - Settlement Procedures
EXHIBIT D - Form of APS Provisions
EXHIBIT E - Form of Notice of Auction Dates
EXHIBIT F - Form of Notice of Proposed Change of Length of Rate
Period
EXHIBIT G - Form of Notice of Change of Length of Rate Period
EXHIBIT H - Form of Notice of Determination Not to Change Length of
Rate Period
EXHIBIT I - Form of Notice of Cure of Failure to Deposit
EXHIBIT J - Form of Notice of Subsequent Cure of Failure to Deposit
EXHIBIT K - Form of Notice of Capital Gain and Taxable Ordinary
Income Dividend
iii
AUCTION AGENCY AGREEMENT dated as of December 10, 1991 between
VAN XXXXXX XXXXXXX MUNICIPAL TRUST, a Massachusetts business trust (the "Fund"),
and Bankers Trust Company, a New York banking corporation (the "Auction
Agent").
WHEREAS, the Fund proposes to issue four series of preferred
shares of beneficial interest, par value $.01 per share, liquidation preference
$50,000 per share, designated Auction Preferred Shares (the "APS") pursuant to
the APS Provisions (as hereinafter defined) and desires that the Auction Agent
perform certain duties in connection with the APS upon the terms and subject to
the conditions of this Agreement, and hereby appoints the Auction Agent to act
in the capacities set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein, the Fund and the Auction Agent agree as
follows:
1. Definitions and Rules of Construction.
1.1 Terms Defined by Reference to APS Provisions. Capitalized
terms not defined herein shall have the respective meanings specified in the APS
Provisions.
1.2 Terms Defined Herein. As used herein and in the Settlement
Procedures, the following terms shall have the following meanings, unless the
context otherwise requires:
(a) "Agent Member" of any Person shall mean the
member of, or participant in, the Securities Depository that will act on behalf
of a Bidder and is identified as such in such Bidder's Master Purchaser's
Letter.
(b) "APS Provisions" shall mean the Certificate of
Vote of the Fund's Board of Trustees establishing the series of shares of APS
pursuant to the Amended and Restated Declaration of Trust of the Fund and
attached hereto as Exhibit D.
(c) "Auction" shall have the meaning specified in
Section 2.1 hereof.
(d) "Auction Procedures" shall mean the auction
procedures constituting Part II of the form of APS provisions.
(e) "Authorized Officer" shall mean each Senior Vice
President, Vice President, Assistant Vice President, Assistant Treasurer and
Assistant Secretary of the Auction Agent and every other officer or employee of
the Auction Agent designated as an "Authorized Officer" for purposes hereof in a
communication to the Fund.
(f) "Broker-Dealer" shall mean any broker-dealer,
commercial bank or other entity permitted by law to perform the functions of a
Broker-Dealer that is a member of, or a participant in, the Securities
Depository or is an affiliate of such member or participant, has been selected
by the Fund and has entered into a Broker-Dealer Agreement that remains
effective.
(g) "Broker-Dealer Agreement" shall mean each
agreement among the Fund, the Auction Agent and a Broker-Dealer substantially in
the form attached hereto as Exhibit A.
(h) "Existing Holder," when used with respect to
shares of any series of APS, shall mean a Person who has signed a Master
Purchaser's Letter and is listed as the beneficial owner of such shares of APS
in the records of the Auction Agent.
(i) "Fund Officer" shall mean the Chairman of the
Board of Trustees of the Fund, the President, each Vice President (whether or
not designated by a number or word or words added before or after the title
"Vice President"), the Secretary, the Treasurer, each Assistant Secretary and
each Assistant Treasurer of the Fund and every other officer or employee of the
Fund designated as a "Fund Officer" for purposes hereof in a notice to the
Auction Agent.
(j) "Master Purchaser's Letter" shall mean a letter
addressed to the Fund, the Auction Agent, a Broker-Dealer and an Agent Member,
substantially in the form attached hereto as Exhibit B.
(k) "Potential Holder," when used with respect to
shares of any series of APS, shall mean any Person, including any Existing
Holder of shares of such
2
series of APS, (i) who shall have executed a Master Purchaser's Letter and (ii)
who may be interested in acquiring shares of such series of APS (or, in the
case of an Existing Holder of shares of such series of APS, additional shares
of such series of APS).
(l) "Settlement Procedures" shall mean the Settlement
Procedures attached hereto as Exhibit C.
(m) "Underwriters" shall mean Xxxxxxx, Sachs & Co.,
Xxxxx Xxxxxx, Xxxxxx Xxxxx & Co., PaineWebber Incorporated, Prudential
Securities Incorporated and any other person named as an underwriter of the APS
in the Underwriting Agreement or any schedule thereto.
(n) "Underwriting Agreement" shall mean the
Underwriting Agreement dated December 5, 1991 among the Fund and the
Underwriters.
1.3 Rules of Construction. Unless the context or use indicates
another or different meaning or intent, the following rules shall apply to the
construction of this Agreement:
(a) Words importing the singular number shall include
the plural number and vice versa.
(b) The captions and headings herein are solely for
convenience of reference and shall not constitute a part of this Agreement nor
shall they affect its meaning, construction or effect.
(c) The words "hereof", "herein", "hereto" and other
words of similar import refer to this Agreement as a whole.
(d) All references herein to a particular time of day
shall be to New York City time.
2. The Auction.
2.1 Purpose; Incorporation by Reference of Auction Procedures
and Settlement Procedures. (a) The APS Provisions provide that the Applicable
Rate per annum for each series of APS for each Subsequent Dividend Period after
the Initial Dividend Period with respect to each series of APS shall, except
under certain conditions, be equal to the rate per annum that a bank or trust
company
3
appointed by the Fund advises has resulted on the Business Day preceding the
first day of such Subsequent Dividend Period from implementation of the Auction
Procedures for such series. Each periodic implementation of the Auction
Procedures is hereinafter referred to as an "Auction." The Board of Trustees
has adopted a resolution appointing Bankers Trust Company as Auction Agent for
purposes of the Auction Procedures for each series of the APS. The Auction Agent
accepts such appointment and agrees to follow the procedures set forth in this
Section 2 and the Auction Procedures for the purpose of determining the
Applicable Rate for each series of APS for each Subsequent Dividend Period
thereof for which the Applicable Rate is to be determined by an Auction.
(b) All of the provisions contained in the Auction
Procedures and the Settlement Procedures are incorporated herein by reference in
their entirety and shall be deemed to be a part hereof to the same extent as if
such provisions were fully set forth herein.
2.2 Preparation of Each Auction; Maintenance of Registry of
Beneficial Owners. (a) Not later than seven days prior to the first Auction Date
for the first series of APS, the Fund shall provide the Auction Agent with a
list of the Broker-Dealers and a manually signed copy of each Broker-Dealer
Agreement for execution by the Auction Agent. Not later than seven days prior to
any Auction Date for any series of APS for which any change in such list of
Broker-Dealers is to be effective, the Fund will notify the Auction Agent in
writing of such change and, if any such change involves the addition of a
Broker-Dealer to such list, shall cause to be delivered to the Auction Agent for
execution by the Auction Agent a Broker-Dealer Agreement signed by such
Broker-Dealer; provided, however, that if the Fund proposes to designate any
Special Dividend Period of any series of APS pursuant to Section 4 of Part I of
the APS Provisions, not later than 11:00 A.M., New York City time, on the
Business Day next preceding the Auction next preceding the first day of such
Special Dividend Period, the Fund shall provide the Auction Agent with a list of
the Broker-Dealers for such series and a manually signed copy of each
Broker-Dealer Agreement or a new Schedule A to the Broker-Dealer Agreement
(which Schedule A shall replace and supersede any previous Schedule A to such
Broker-Dealer Agreement) with each Broker-Dealer for such series. The Auction
Agent and the Fund shall have entered into a Broker-
4
Dealer Agreement with each Broker-Dealer prior to the participation of any such
Broker-Dealer in any Auction.
(b) In the event that any Auction Date for any series
of APS shall be changed after the Auction Agent shall have given the notice
referred to in clause (vi) of paragraph (a) of the Settlement Procedures, or
after the notice referred to in Section 2.5(a) hereof, if applicable, the
Auction Agent, by such means as the Auction Agent deems practicable, shall give
notice of such change to the Broker-Dealers for such series not later than the
earlier of 9:15 A.M. on the new Auction Date or 9:15 A.M. on the old Auction
Date.
(c) (i) The Auction Agent shall maintain
a registry of the beneficial owners of the shares of each series of APS
who shall constitute Existing Holders of shares of such series of APS
for purposes of Auctions and shall indicate thereon the identity of
the respective Broker-Dealer of each Existing Holder, if any, on whose
behalf such Broker-Dealer submitted the most recent Order in any
Auction which resulted in such Existing Holder continuing to hold or
purchasing shares of such series of APS. The Auction Agent shall keep
such registry current and accurate. The Fund shall provide or cause
to be provided to the Auction Agent at or prior to the Date of Original
Issue of each series of APS a list of the initial Existing Holders of
the shares of each such series, the number of shares purchased by each
such Existing Holder and the respective Broker-Dealer of each such
Existing Holder or the affiliate thereof through which each such
Existing Holder purchased such shares. The Auction Agent shall advise
the Fund in writing whenever the number of Existing Holders is 500 or
more. The Auction Agent may rely upon, as conclusive evidence of the
identities of the Existing Holders of shares of any series of APS, (A)
such list, (B) the results of Auctions and (C) notices from any
Existing Holder, the Agent Member of any Existing Holder or the
Broker-Dealer of any Existing Holder as described in the first
sentence of Section 2.2(c)(iii) hereof.
5
(ii) In the event of any partial redemption
of any series of APS, the Auction Agent shall, at least two Business
Days prior to the next Auction for such series, request the Agent
Member of each Existing Holder of shares of APS of such series to
disclose to the Auction Agent (upon selection by such Agent Member of
the Existing Holders whose shares of APS of such series are to be
redeemed) the number of shares of APS of such series, if any, of such
Existing Holder which are subject to such redemption, provided the
Auction Agent has been furnished with the name and telephone number of
a person or department at such Agent Member from which it shall
request such information. Upon any refusal of an Agent Member to
release such information, the Auction Agent shall deliver to such Agent
Member a facsimile copy of the Existing Holder's Master Purchaser's
Letter, which authorizes and instructs such Agent Member to release
such information to the Auction Agent. In the absence of receiving any
such information with respect to an Existing Holder, from such
Existing Holder's Agent Member or otherwise, the Auction Agent may
continue to treat such Existing Holder as the beneficial owner of the
number of shares of APS of such series shown in the Auction Agent's
registry.
(iii) The Auction Agent shall be required to
register a transfer of shares of APS of any series from an Existing
Holder of such shares of APS to another Person only if such transfer is
made to a Person that has delivered, or on whose behalf has been
delivered, a signed Master Purchaser's Letter to the Auction Agent and
if (A) such transfer is pursuant to an Auction or (B) the Auction
Agent has been notified in writing (I) in a notice substantially in the
form of Exhibit D to the Broker-Dealer Agreements by such Existing
Holder, the Agent Member of such Existing Holder or the Broker-Dealer
of such Existing Holder of such transfer or (II) in a notice
substantially in the form of Exhibit E to the Broker-Dealer Agreements
by the Broker-Dealer of any Person that purchased or sold such APS in
an Auction
6
of the failure of such shares of APS to be transferred as a result of
such Auction. The Auction Agent is not required to accept any such
notice for an Auction unless it is received by the Auction Agent by
3:00 P.M. on the Business Day preceding such Auction.
(iv) The Auction Agent is not required to
accept the Master Purchaser's Letter of any Potential Holder who
wishes to submit a Bid for the first time in an Auction or of any
Potential Holder or Existing Holder who wishes to amend its Master
Purchaser's Letter unless such letter or amendment is received by the
Auction Agent by 3:00 P.M. on the Business Day preceding such Auction.
(d) The Auction Agent may request the Broker-Dealers,
as set forth in the Broker-Dealer Agreements, to provide the Auction Agent with
a list of their respective customers that such Broker-Dealers believe are
Existing Holders of shares of any series of APS. The Auction Agent shall keep
confidential such registry of Existing Holders and shall not disclose the
identities of the Existing Holders of such shares of APS to any Person other
than the Fund and the Broker-Dealer that provided such information.
2.3 Information Concerninq Rates. (a) The Applicable
Percentage on the date of this Agreement for APS is 110%. If there is any change
in the credit rating of APS by either of the rating agencies (or substitute or
successor rating agencies) referred to in the definition of "Applicable
Percentage" resulting in any change in the Applicable Percentage for APS after
the date of this Agreement, the Fund shall notify the Auction Agent in writing
of such change in the Applicable Percentage prior to 12:00 Noon on the Business
Day prior to the next Auction Date for any series of APS succeeding such
change. If the Fund designates all or a portion of any dividend on shares of any
series of APS to consist of net capital gains or other income taxable for
federal income tax purposes, it will indicate, in its notice in the form of
Exhibit K hereto to the Auction Agent pursuant to Section 2.6 hereof, the
Applicable Percentage for such series to be in effect for the Auction Date on
which the dividend rate for such dividend is to be fixed. In determining the
Maximum Rate for any series of APS on any Auction
7
Date as set forth in Section 2.3(b)(i) hereof, the Auction Agent shall be
entitled to rely on the last Applicable Percentage for APS of which it has most
recently received notice from the Fund (or, in the absence of such notice, the
percentage set forth in the first sentence of this paragraph (a)), except that
if the Fund shall have notified the Auction Agent of an Applicable Percentage to
be in effect for an Auction Date in accordance with the preceding sentence, the
Applicable Percentage in effect for the next succeeding Auction Date of any
series of APS shall be, unless the Fund notifies the Auction Agent of a change
in the Applicable Percentage for such succeeding Auction Date pursuant to this
Section 2.3(a), the Applicable Percentage that was in effect on the first
preceding Auction Date for APS with respect to which the dividend, the rate
for which was fixed on such Auction Date, did not include any net capital gains
or other income taxable for federal income tax purposes.
(b) (i) On each Auction Date for any series of APS,
the Auction Agent shall deter-mine the Maximum Rate for such series.
The Maximum Rate for any series of APS on any Auction Date shall be:
(A) in the case of any Auction Date which is
not the Auction Date immediately prior to the first
day of any proposed Special Dividend Period
designated by the Fund pursuant to Section 4 of Part
I of the APS Provisions, the product of (1) the "AA"
Composite Commercial Paper Rate on such Auction Date
for the next Rate Period of such series and (2) the
Applicable Percentage on such Auction Date, unless
such series has or had a Special Dividend Period
(other than a Special Dividend Period of 28 Rate
Period Days or less) and an Auction at which
Sufficient Clearing Bids existed has not yet occurred
for a Minimum Dividend Period of such series after
such Special Dividend Period, in which case the
higher of:
(1) the dividend rate on shares of
such series for the then-ending Rate Period,
and
8
(2) the product of x) the higher of
(I) the "AA" Composite Commercial Paper
Rate on such Auction Date for the
then-ending Rate Period of such series, if
such Rate Period consists of less than four
Dividend Periods, or the Treasury Rate on
such Auction Date for such Rate Period, if
such Rate Period consists of four or more
Dividend Periods and (II) the "AA" Composite
Commercial Paper Rate on such Auction Date
for such Special Dividend Period of such
series, if such Special Dividend Period is
less than four Dividend Periods, or the
Treasury Rate on such Auction Date for such
Special Dividend Period, if such Special
Dividend Period consists of four or more
Dividend Periods, and (y) the Applicable
Percentage on such Auction Date; or
(B) in the case of any Auction Date which is
the Auction Date immediately prior to the first day
of any proposed Special Dividend Period designated
by the Fund pursuant to Section 4 of Part I of the
APS Provisions, the product of (1) the highest of (x)
the "AA" Composite Commercial Paper Rate on such
Auction Date for the then-ending Rate Period of such
series, if such Rate Period consists of four or more
Dividend Periods, or the Treasury Rate on such
Auction Date for such Rate Period, if such Rate
Period consists of four or more Dividend Periods, (y)
the "AA" Composite Commercial Paper Rate on such
Auction Date for such Special Dividend Period of such
series for which the Auction is being held, if such
Special Dividend Period consists of less than four
Dividend Periods, or the Treasury Rate on such
Auction Date for such Special Dividend Period of
such series for which the Auction is being held, if
such Special Dividend Period consists of less than
four Dividend Periods, and (z) the "AA" Composite
9
Commercial Paper Rate on such Auction Date for
Minimum Dividend Periods and (2) the Applicable
Percentage on such Auction Date.
Not later than 9:30 A.M. on each Auction Date, the Auction Agent shall
notify the Fund and the Broker-Dealers of the Maximum Rate so
determined and the "AA" Composite Commercial Paper Rate(s) and Treasury
Rate(s), as the case may be, used to make such determination.
(ii) From and after a Failure to Deposit by the Fund
during any Rate Period of any series of APS, until such failure is
cured and a late charge, if applicable, is paid, in accordance with
subparagraph (c)(i) of Section 2 of Part I of the APS Provisions, on
the first day of each Rate Period of such series the Auction Agent
shall determine the Treasury Rate for such Rate Period with four or
more Dividend Periods and the "AA" Composite Commercial Paper Rate for
Minimum Dividend Periods and Rate Periods with less than four Dividend
Periods. Not later than 9:30 A.M. on each such first day, the Auction
Agent shall notify the Fund of the applicable "AA" Composite
Commercial Paper Rate and Treasury Rate.
(iii) If any "AA" Composite Commercial Paper Rate or
Treasury Rate, as the case may be, is not quoted on an interest basis,
the Auction Agent shall convert the quoted rate to the interest
equivalent thereof as set forth in the definition of such rate in the
APS Provisions if the rate obtained by the Auction Agent is quoted on a
discount basis, or if such rate is quoted on a basis other than an
interest or discount basis the Auction Agent shall convert the quoted
rate to an interest rate after consultation with the Fund as to the
method of such conversion.
(iv) If any "AA" Composite Commercial Paper Rate is
to be based on rates supplied by Commercial Paper Dealers and one or
more of the Commercial Paper Dealers shall not provide a quotation for
the determination of
10
such "AA" Composite Commercial Paper Rate, the Auction Agent shall
immediately notify the Fund so that the Fund can determine whether to
select a Substitute Commercial Paper Dealer or Substitute Commercial
Paper Dealers to provide the quotation or quotations not being supplied
by any Commercial Paper Dealer or Commercial Paper Dealers. The Fund
shall promptly advise the Auction Agent of any such selection.
(v) If any Treasury Rate is to be based on rates
supplied by U.S. Government Securities Dealers and one or more of the
U.S. Government Securities Dealers shall not provide a quotation for
the determination of such Treasury Rate, the Auction Agent shall
immediately notify the Fund so that the Fund can determine whether to
select a Substitute U.S. Government Securities Dealer or Substitute
U.S. Government Securities Dealers to provide the quotation or
quotations not being supplied by any U.S. Government Securities Dealer
or U.S. Government Securities Dealers. The Fund shall promptly advise
the Auction Agent of any such selection.
(c) The greater of the maximum marginal regular federal
individual income tax rate applicable to ordinary income or the maximum marginal
regular federal corporate income tax rate (the "Highest Marginal Rate") on the
date of this Agreement is 34%. If there is any change in the Highest Marginal
Rate, the Fund shall notify the Auction Agent in writing of such change prior
to 12:00 Noon on the Business Day prior to the next Auction Date for APS
succeeding such change. In determining the Maximum Rate for any series of APS on
any Auction Date, the Auction Agent shall be entitled to rely on the Highest
Marginal Rate of which it has most recently received notice from the Fund (or,
in the absence of such notice, the percentage set forth in the first sentence of
this paragraph (c)).
2.4 Auction Schedule. The Auction Agent shall conduct Auctions in
accordance with the schedule set forth below. Such schedule may be changed by
the Auction Agent with the consent of the Fund, which consent shall not be
unreasonably withheld. The Auction Agent shall give written notice of any such
change to each Broker-Dealer. Such notice shall be given prior to the close of
11
business on the Business Day next preceding the first Auction Date on which any
such change shall be effective.
Time Event
---- -----
By 9:30 A.M. Auction Agent advises the Fund and Broker-Dealers
of the applicable Maximum Rate and the "AA"
Composite Commercial Paper Rate(s) and Treasury
Rate(s), as the case may be, used in determining
such Maximum Rate as set forth in Section 2.3(b)(i)
hereof.
9:30 A.M. -- 1:30 P.M. Auction Agent assembles information communicated
to it by Broker-Dealers as provided in Section
2(a) of the Auction Procedures. Submission
Deadline is 1:30 P.M.
Not earlier than 1:30 P.M. Auction Agent makes determinations pursuant to
Section 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
APS 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.
2.5 Designation of Special Dividend Period. (a) The APS Provisions will
provide that, subject to the Fund's option to designate a Special Dividend
Period as
12
referred to in paragraph (b) of this section 2.5, (i) each Rate Period of any
series of APS will be a Minimum Dividend Period (a duration of 7 Rate Period
Days, subject to certain exceptions with respect to APS Series A and Aps Series
C and a duration of 28 Rate Period Days, subject to certain exceptions with
respect to APS Series B and APS Series D) and (ii) each Rate Period following a
Rate Period of any series of APS that is other than a Minimum Dividend Period
will be a Minimum Dividend Period. Not less than 10 nor more than 20 days
prior to the last day of any such Rate Period that is not a Minimum Dividend
Period, (i) the Fund shall deliver to the Auction Agent a notice of the
Auction Date of the next succeeding Auction for such series in the form of
Exhibit E hereto and (ii) the Auction Agent shall deliver such notice by
first-class mail, postage prepaid, to each Existing Holder of shares of such
series at the address specified in such Existing Holder's Master Purchaser's
Letter and to the Broker-Dealers for such series as promptly as practicable
after its receipt of such notice from the Fund.
(b) Pursuant to the APS Provisions, the Fund may, at its
option, designate a Special Dividend Period for any series of APS in the manner
described in Section 4 of Part I of the APS Provisions.
(i) If the Fund proposes to designate any succeeding
Subsequent Dividend Period of any series of APS as a Special Dividend
Period, (A) the Fund shall deliver to the Auction Agent a notice of
such proposed Special Dividend Period in the form of Exhibit F hereto
not less than 20 nor more than 30 days prior to the first day of such
proposed Special Dividend Period and (B) the Auction Agent on behalf of
the Fund shall deliver such notice by first-class mail, postage
prepaid, to each Existing Holder of shares of such series of APS at the
address specified in such Existing Holder's Master Purchaser's Letter
and to the Broker-Dealers for such series as promptly as practicable
after its receipt of such notice from the Fund.
(ii) If the Board of Trustees determines to designate
such succeeding Subsequent Dividend Period as a Special Dividend
13
Period, (A) the Fund shall deliver to the Auction Agent a notice of
such determination in the form of Exhibit G hereto not later than 11:00
A.M. on the second Business Day next preceding the first day of such
proposed Special Dividend Period and (B) the Auction Agent shall
deliver such notice to the Broker-Dealers for such series not later
than 3:00 P.M. on such second Business Day.
(iii) If the Fund shall deliver to the Auction Agent
a notice stating that the Fund has determined not to exercise its
option to designate such succeeding Subsequent Dividend Period as a
Special Dividend Period with respect to which it has delivered a notice
in the form of Exhibit F hereto not later than 11:00 A.M. on the second
Business Day next preceding the first day of such proposed Special
Dividend Period, or shall fail to timely deliver either such notice or
a notice in the form of Exhibit G hereto, the Auction Agent shall
deliver a notice in the form of Exhibit H hereto to the Broker-Dealers
for such series not later than 3:00 P.M. on such second Business Day.
Such change in the length of any Rate Period shall not occur if (a) on the
Auction Date next preceding the first day of such Special Dividend Period
Sufficient Clearing Bids shall not exist or (b) a Failure to Deposit shall have
occurred prior to such change with respect to shares of such series of APS and
shall not have been cured in accordance with the APS Provisions.
2.6 Allocation of Taxable Income. The Fund may, at its option,
designate all or a portion of any dividend on shares of any series of APS to
consist of net capital gains or other income taxable for federal income tax
purposes by delivering to the Auction Agent a notice in the form of Exhibit K
hereto of such designation 15 days prior to the Auction Date on which the
Applicable rate for such dividend is to be fixed. The Auction Agent will deliver
such notice to the Broker-Dealers for such series on the Business Day following
its receipt of such notice from the Fund. Within two Business Days after any
Auction Date involving the allocation of income taxable for federal income tax
purposes, the Auction Agent shall
14
notify each Broker-Dealer for the related series as to the dollar amount per
share of such taxable income and income exempt from federal income taxation
included in the related dividend.
2.7 Failure to Deposit. (a) If:
(i) any Failure to Deposit shall have occurred with
respect to shares of any series of APS during any Rate Period thereof
(other than any Special Dividend Period consisting of four or more
Dividend Periods or any Rate Period succeeding any Special Dividend
Period consisting of four or more Dividend Periods during which a
Failure to Deposit occurred that has not been cured); and
(ii) prior to 12:00 Noon, New York City time, on the
third Business Day next succeeding the date on which such Failure to
Deposit occurred, such Failure to Deposit shall have been cured in
accordance with the next succeeding sentence and the Fund shall have
paid to the Auction Agent a late charge equal to the sum of (A) if such
Failure to Deposit consisted of the failure timely to pay to the
Auction Agent the full amount of dividends with respect to any Dividend
Period on the shares of such series, an amount computed by multiplying
(1) 200% of the "AA" Composite Commercial Paper Rate for the Rate
Period during which such Failure to Deposit occurs on the Dividend
Payment Date for such Dividend Period by (2) a fraction, the numerator
of which shall be the number of days for which such Failure to Deposit
has not been cured in accordance with the next succeeding sentence
(including the day such Failure to Deposit occurs and excluding the day
such Failure to Deposit is cured) and the denominator of which shall be
365, and applying the rate obtained against the aggregate liquidation
preference of the outstanding shares of such series of APS and (B) if
such Failure to Deposit consisted of the failure timely to pay to the
Auction Agent the Optional Redemption Price or Mandatory Redemption
Price, as the case may be, of the shares of such series of APS, if
any, for which Notice of Redemption
15
has been given by the Fund pursuant to paragraph (b) of Section 3 of
Part I of the APS Provisions, an amount computed by multiplying (x)
200% of the "AA" Composite Commercial Paper Rate for the Rate Period
during which such Failure to Deposit occurs on the redemption date by
(y) a fraction, the numerator of which shall be the number of days for
which such Failure to Deposit was not cured in accordance with the next
succeeding sentence (including the day such Failure to Deposit occurs
and excluding the day such Failure to Deposit was cured) and the
denominator of which shall be 365, and applying the rate obtained
against the aggregate liquidation preference of the outstanding shares
of such series of APS to be redeemed,
then the Auction Agent shall deliver a notice in the form of Exhibit I hereto by
first-class mail, postage prepaid, to the Broker-Dealers for such series not
later than one Business Day after its receipt of the payment from the Fund
curing such Failure to Deposit and such late charge. A Failure to Deposit with
respect to any series of APS shall have been cured (if such Failure to Deposit
is not solely due to the willful failure of the Fund to make the required
payment to the Auction Agent) with respect to any Rate Period thereof if, not
later than 12:00 Noon, New York City time, on the fourth Business Day preceding
the Auction Date for the Rate Period subsequent to such Rate Period, the Fund
shall have paid to the Auction Agent (A) all accumulated and unpaid dividends on
the shares of such series of APS and (B) without duplication, the Optional
Redemption Price or Mandatory Redemption Price, as the case may be, for the
shares of such series of APS, if any, for which Notice of Redemption has been
given by the Fund pursuant to paragraph (b) of Section 3 of Part I of the APS
Provisions.
(b) If:
(i) any Failure to Deposit shall have
occurred with respect to shares of any series of APS during a
Rate Period thereof (other than any Special Dividend Period
consisting of four or more Dividend Periods or any Rate
Period succeeding any Special Dividend Period consisting of
four or more Dividend
16
periods during which a Failure to Deposit occurred that has
not been cured), and, prior to 12:00 Noon on the third
Business Day next succeeding the date on which such Failure
to Deposit occurred, such Failure to Deposit shall not have
been cured within the meaning of the last sentence of Section
2.7(a) hereof and the Fund shall not have paid to the Auction
Agent the late charge described in such Section 2.7(a), but
such Failure to Deposit shall subsequently be so cured; or
(ii) any Failure to Deposit shall have
occurred with respect to shares of any series of APS during a
Special Dividend Period consisting of four or more Dividend
Periods, or during any Rate Period succeeding any Special
Dividend Period consisting of four or more Dividend Periods
during which a Failure to Deposit occurred, and such Failure
to Deposit shall subsequently have been cured within the
meaning of the last sentence of Section 2.7(a) hereof,
then the Auction Agent shall deliver a notice in the form of Exhibit J hereto to
the Broker-Dealers for such series not later than one Business Day after the
receipt of the payment from the Fund during such Failure to Deposit.
Notwithstanding the foregoing, the Auction Agent shall conduct an Auction on an
Auction Date which occurs simultaneously with the date of commencement of a
Failure to Deposit.
2.8 Broker-Dealers. (a) Not later than 12:00 Noon on each Auction Date
for any series of APS, the Fund shall pay to the Auction Agent an amount in cash
equal to the aggregate fees payable to the Broker-Dealers for such series
pursuant to Section 2.8 of the Broker-Dealer Agreements for such series. The
Auction Agent shall apply such moneys as set forth in Section 2.8 of each such
Broker-Dealer Agreement.
(b) The Fund shall obtain the consent of the Auction Agent
prior to selecting any Person to act as a Broker-Dealer, which consent shall not
be unreasonably withheld.
17
(c) The Auction Agent shall terminate any Broker-Dealer
Agreement as set forth therein if so directed by the Fund, provided that at
least one Broker-Dealer Agreement would be in effect for each series of APS
after such termination.
(d) Subject to the Auction Agent's having consented to the
selection of the relevant Broker-Dealer pursuant to Section 2.8(b) hereof, the
Auction Agent shall from time to time enter into such Broker-Dealer Agreements
with one or more Broker-Dealers as the Fund shall request, and shall enter into
such schedules to any such Broker-Dealer Agreements as the Fund shall request,
which schedules, among other things, shall set forth the series of APS to which
such Broker-Dealer Agreement relates.
2.9 Ownership of Shares of APS. The Fund shall notify the Auction Agent
if the Fund or any affiliate of the Fund acquires any shares of APS of any
series. Neither the Fund nor any affiliate of the Fund shall submit any Order in
any Auction for APS, except as set forth in the next sentence. Any Broker-Dealer
that is an affiliate of the Fund may submit Orders in Auctions, but only if such
Orders are not for its own account. For purposes of this Section 2.9, a
Broker-Dealer shall not be deemed to be an affiliate of the Fund solely because
one or more of the directors or executive officers of such Broker-Dealer or of
any Person controlled by, in control of or under common control with such
Broker-Dealer is also a trustee of the Fund. The Auction Agent shall have no
duty or liability with respect to enforcement of this Section 2.9.
2.10 Access to and Maintenance of Auction Records. The Auction Agent
shall, upon the receipt of prior written notice from the Fund, afford to the
Fund access at reasonable times during normal business hours to all books,
records, documents and other information concerning the conduct and results of
Auctions. The Auction Agent shall maintain records relating to any Auction for a
period of six years after such Auction, and such records shall, in reasonable
detail, accurately and fairly reflect the actions taken by the Auction Agent
hereunder.
18
2.11 Dividend and Redemption Price Deposit. The Fund shall pay to the
Auction Agent, not later than 12:00 noon, New York City time, (A) on the
Business Day next preceding any Dividend Payment Date for such series, in funds
available on such Dividend Payment Date in The City of New York, New York, the
full amount of any dividend (whether or not earned or declared) to be paid on
such Dividend Payment Date on any share of such series (B) on the Business Day
next preceding any redemption date in funds available on such redemption date
for such series in The City of New York, New York, the Redemption Price to be
paid on such redemption date for any share of such series after notice of
redemption is given as set forth in the Certificate of Vote.
3. The Auction Agent as Dividend and
Redemption Price Disbursing Agent.
The Auction Agent, as dividend and redemption price disbursing agent,
shall pay to the Holders of shares of APS of any series (i) on each Dividend
Payment Date for such series, dividends on the shares of APS of such series,
(ii) on any date fixed for redemption of shares of APS of any series, the
Redemption Price of any shares of such series called for redemption and (iii)
any late charge related to any payment of dividends or Redemption Price, in
each case after receipt of the necessary funds from the Fund with which to pay
such dividends, Redemption Price or late charge. The amount of dividends for
any Rate Period for any series of APS to be paid by the Auction Agent to the
Holders of such shares of such series will be determined by the Fund as set
forth in Section 2 of Part I of the APS Provisions with respect to such series.
The Redemption Price of any shares to be paid by the Auction Agent to the
Holders will be determined by the Fund as set forth in Section 3 of Part I of
the APS Provisions with respect to such series. The Fund shall notify the
Auction Agent in writing of a decision to redeem shares of any series of APS at
least five days prior to the date a notice of redemption is required to be
mailed to the Holders of the shares to be redeemed by paragraph (b) of Section 3
of Part I of the APS Provisions. Such notice by the Fund to the Auction Agent
shall contain the information required by paragraph (b) of Section 3 of Part I
of the APS Provisions to be stated in the notice of redemption required to be
mailed by the Fund to such Holders.
19
4. The Auction Agent as Transfer Agent and Registrar.
4.1 Issue of Share Certificates. Upon the Date of Original Issue of
each series of APS, one certificate representing all of the shares of such
series issued on such date shall be issued by the Fund and, at the request of
the Fund, registered in the name of Cede & Co. and Countersigned by the Auction
Agent.
4.2 Registration of Transfer of Shares. Shares of each series of APS
shall be registered solely in the name of the Securities Depository or its
nominee.
4.3 Removal of Legend on Restricted Shares. All requests for removal of
legends on shares of any series of APS indicating restrictions on transfer shall
be accompanied by an opinion of counsel stating that such legends may be removed
and such shares freely transferred, such opinion to be delivered under cover of
a letter from a Fund Officer authorizing the Auction Agent to remove the legend
on the basis of said opinion.
4.4 Lost Share Certificates. The Auction Agent shall issue and register
replacement certificates for certificates represented to have been lost, stolen
or destroyed upon the fulfillment of such requirements as shall be deemed
appropriate by the Fund and the Auction Agent, subject at all times to
provisions of law, the By-Laws of the Fund governing such matters and
resolutions adopted by the Fund with respect to lost securities. The Auction
Agent may issue new certificates in exchange for and upon the cancellation of
mutilated certificates. Any request by the Fund to the Auction Agent to issue a
replacement or new certificate pursuant to this Section 4.4 shall be deemed to
be a representation and warranty by the Fund to the Auction Agent that such
issuance will comply with such provisions of law and the By-Laws and resolutions
of the Fund.
4.5 Disposition of Cancelled Certificates; Record Retention. The
Auction Agent shall retain all share certificates which have been cancelled in
transfer or exchange and all accompanying documentation in accordance with
applicable rules and regulations of the Securities and Exchange Commission for
two calendar years. Upon the expiration of this two-year period, the Auction
Agent shall deliver to the Fund the cancelled certificates and accompanying
documentation. The Fund also
20
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. There-after such records shall not be
destroyed by the Fund without the concurrence of the Auction Agent.
4.6 Share Transfer Books. For so long as the Auction Agent, Bankers
Trust Company is acting as the transfer agent for any series of APS pursuant to
this Agreement, it shall maintain a share transfer book containing a list of
the Holders of the shares of each series of APS, the number of shares of each
series held by such Holders and the address of each Holder. The Auction Agent
shall record in such share transfer books any change of address of a Holder upon
notice by such Holder. In case of any request or demand for the inspection of
the share transfer books of the Fund or any other books in the possession of the
Auction Agent, the Auction Agent will notify the Fund and secure instructions as
to permitting or refusing such inspection. The Auction Agent reserves the
right, however, to exhibit the share transfer books or other books to any
Person in case it is advised by its counsel that its failure to do so would be
unlawful.
4.7 Return of Funds. Any funds deposited with the Auction Agent
hereunder by the Fund for any reason, including but not limited to redemption of
shares of APS of any series, that remain unpaid after ninety days shall be
repaid to the Fund upon the written request of the Fund, together with interest,
if any, earned thereon.
5. Representations and Warranties of the Fund.
The Fund represents and warrants to the Auction Agent that:
(a) the Fund has been duly organized and is subsisting as a
voluntary association with transferable shares (commonly referred to as a
business trust) under the laws of The Commonwealth of Massachusetts and has all
necessary power and authority to execute and deliver this Agreement and to
authorize, create and issue the shares of each series of APS;
21
(b) this Agreement has been duly and validly authorized,
executed and delivered by the Fund and, assuming due authorization, execution
and delivery by the Auction Agent, constitutes the legal, valid and binding
obligation of the Fund subject, as to enforceability, to bankruptcy,
insolvency, reorganization, moratorium, receivership or similar laws, whether
statutory or decisional, relating to or affecting creditors' rights and to
general equitable principles (regardless of whether enforcement is sought in
equity or at law);
(c) the form of the certificate evidencing the shares of APS
complies with all applicable laws of The Commonwealth of Massachusetts;
(d) the shares of APS, when issued, delivered and paid for on
the Date of Original Issue as contemplated by the Underwriting Agreement, will
have been duly authorized, validly issued, fully paid and nonassessable, except
as provided under Massachusetts law:
(e) assuming the Underwriters comply with their obligations
under the Underwriting Agreement and that the purchasers of the APS comply with
their obligations in the Master Purchaser's Letter, no consent, authorization
or order of, or filing or registration with, any court, governmental agency or
official (except such as have been obtained and such as may be required under
the Securities Act of 1933, as amended, or the Investment Company Act of 1940,
as amended, or under the blue sky or state securities laws) is required in
connection with the execution and delivery of this Agreement or the issuance of
the shares of the APS; and
(f) the issuance and sale of the APS, the execution, delivery
and performance of this Agreement, compliance by the Fund with all provisions
hereof, and the consummation of the transactions contemplated hereby or by the
Underwriting Agreement or the Broker-Dealer Agreements, will not conflict with,
constitute a breach of any of the terms or provisions of, or a default under, or
result in the creation or imposition of any material lien, charge or encumbrance
upon any of the assets of the Fund pursuant to the terms of any agreement,
indenture or instrument to which the Fund is a party or by which the Fund is
bound, or result in a violation of the Declaration of Trust, APB Provisions or
By-Laws of the Fund or
22
of any order, rule or regulation of any court or governmental agency having
jurisdiction over the Fund or its property which conflict, breach, default, lien
or violation, individually or in the aggregate, would have a material adverse
effect on the business, financial position or results of operations of the
Fund.
6. The Auction Agent.
6.1 Duties and Responsibilities. (a) The Auction Agent is acting solely
as agent for the Fund hereunder and owes no fiduciary duties to any other
Person by reason of this Agreement.
(b) The Auction Agent undertakes to perform such duties and
only such duties as are specifically set forth in this Agreement and the
Broker-Dealer Agreements, and no implied covenants or obligations shall be read
into this Agreement against the Auction Agent.
(c) In the absence of bad faith or gross negligence on its
part, the Auction Agent shall not be liable for any action taken, suffered, or
omitted or for any error of judgment made by it in the performance of its duties
under this Agreement except that the Auction Agent shall be liable for any error
of judgment made in good faith if the Auction Agent shall have been grossly
negligent in ascertaining the pertinent facts.
(d) Any funds deposited with the Auction Agent hereunder by
the Fund for any reason, including the payment of dividends or the redemption of
shares of APS of any series, that remain with the Auction Agent after 90 days
shall be repaid to the Fund upon the written request of the Fund, together with
interest, if any, earned thereon.
6.2 Rights of the Auction Agent. (a) The Auction Agent may rely and
shall be protected in acting or refraining from acting upon any communication
authorized hereby and upon any written instruction, notice, request, direction,
consent, report, certificate, share certificate or other instrument, paper or
document believed by it to be genuine. The Auction Agent shall not be liable
for acting upon any telephone communication authorized hereby which the Auction
Agent believes in good faith to have been given by the Fund or by any
Broker-Dealer.
23
The Auction Agent may record telephone communications with the Fund or with any
Broker-Dealer.
(b) The Auction Agent may consult with counsel reasonably
acceptable to the Fund and the advice of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon.
(c) The Auction Agent shall not be required to advance,
expend or risk its own funds or other-wise incur or become exposed to financial
liability in the performance of its duties hereunder.
(d) The Auction Agent may perform its duties and exercise its
rights hereunder either directly or by or through agents or attorneys and shall
not be responsible for any misconduct on the part of any agent or attorney
appointed by it with due care hereunder except as set forth above in Section
6.1(c).
6.3 Auction Agent's Disclaimer. The Auction Agent makes no
representation as to the validity or adequacy of this Agreement (except as to
the Auction Agent's duties hereunder and as to the due authorization, execution
and delivery of this Agreement), the Broker-Dealer Agreements (except as to the
Auction Agent's duties thereunder) or the shares of any series of APS.
6.4 Compensation, Expenses and Indemnification. (a) The Fund shall pay
the Auction Agent from time to time reasonable compensation for all services
rendered by it under this Agreement and the Broker-Dealer Agreements in such
amounts as may be agreed to by the Fund and the Auction Agent from time to time.
(b) The Fund shall reimburse the Auction Agent upon its
request for all reasonable expenses, disbursements and advances incurred or
made by the Auction Agent in accordance with any provision of this Agreement and
the Broker-Dealer Agreements (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any expense or
disbursement attributable to its gross negligence or bad faith.
24
(c) The Fund shall indemnify the Auction Agent for and hold it
harmless against, any loss, liability or expense incurred without gross
negligence or bad faith on its part, arising out of or in connection with its
agency under this Agreement and the Broker-Dealer Agreements, including the
costs and expenses of defending itself against any claim or liability in
connection with its exercise or performance of its duties hereunder and
thereunder for which indemnification is provided by this subsection.
7. Miscellaneous.
7.1 Term of Agreement. (a) The term of this Agreement is unlimited
unless it shall be terminated as provided in this Section 7.1. The Fund may
terminate this Agreement any time by so notifying the Auction Agent in writing,
provided that the Fund has entered into an agreement in substantially the form
of this Agreement with a successor auction agent. The Auction Agent may
terminate this Agreement upon written notice to the Fund, such termination to be
effective on the earlier of (i) the date specified in such notice which shall
not be earlier than 90 days after the giving of such notice or (ii) the date on
which a successor trust company is appointed by the Fund pursuant to an
agreement containing substantially the same terms and conditions as this
Agreement.
(b) Except as otherwise provided in this paragraph (b), the
respective rights and duties of the Fund and the Auction Agent under this
Agreement shall cease upon termination of this Agreement. The Fund's obligations
under Section 6.4 hereof and its representations and warranties contained in
Section 5 hereof and the Auction Agent's obligations and liabilities under
Sections 2.10 and 4.5 hereof shall survive the termination hereof. Upon
termination of this Agreement, the Auction Agent shall, at the Fund's request,
promptly deliver to the Fund copies of all books and records maintained by it
in connection with its duties hereunder.
7.2 Communications. Except for (a) communications authorized to be by
telephone pursuant to this Agreement or the Auction Procedures and (b)
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,
25
requests and other communications to any party hereunder shall be in writing
(including telecopy or similar writ- ing) given to such person at its address or
telecopy number set forth below:
If to the Company, Van Xxxxxx Xxxxxxx
addressed: Municipal Trust
Xxx Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: Treasurer
Telephone No.: (000) 000-0000
With a copy sent to:
Xxxxxx XxXxxxxxx
Xxx Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
If to the Auction Bankers Trust Company
Agent, addressed: Corporate Trust and Agency Group
Four Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Auction Rate Securities
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
or to such other address as the party to whom the communication is addressed
shall have previously communicated to the other party. Communications shall be
given on behalf of the Fund by a Fund Officer and on behalf of the Auction Agent
by an Authorized Officer. Communications shall be effective when received at the
proper address.
7.3 Entire Agreement. This Agreement contains the entire agreement
among the parties relating to the subject matter hereof, and there are no other
representations, endorsements, promises, agreements or understandings, oral,
written or inferred, between the parties.
26
7.4 Benefits. Nothing herein, express or implied, shall give to any
Person, other than the Fund, the Auction Agent and their respective successors
and assigns, any benefit of any legal or equitable right, remedy or claim
hereunder.
7.5 Amendment; Waiver. (a) This Agreement shall not be deemed or
construed to be modified, amended, rescinded, cancelled or waived, in whole or
in part, except by a written instrument signed by a duly authorized
representative of the party to be charged. The Fund shall notify the Auction
Agent and each Broker-Dealer of any change in the Fund's Declaration of Trust,
as amended and restated as of the date hereof, prior to the effective date of
any such change.
(b) Failure of either party hereto to exercise any right or
remedy hereunder in the event of a breach hereof by the other party shall not
constitute a waiver of any such rights or remedies with respect to any
subsequent breach.
7.6 Successors and Assigns. This Agreement shall be binding upon, inure
to the benefit of, and be enforceable by, the respective successors of each of
the Fund and the Auction Agent.
7.7 Limitation of Liability. Pursuant to the provisions of Article V,
Section 5.5 of the Fund's Declaration of Trust, as amended or restated as of
the date hereof, this Agreement is entered into by the trustees of the Fund not
individually, but as trustees under such Declaration of Trust and the
obligations of the Fund hereunder are not binding upon any such trustees or
shareholders of the Fund, individually, but bind only the trust estate.
7.8 Severability. If any clause, provision or section hereof shall be
ruled invalid or unenforceable by any court of competent jurisdiction, the
invalidity or unenforceability of such clause, provision or section shall not
affect any of the remaining clauses, provisions or sections hereof.
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.
27
7.10 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.
28
IN WITNESS WHEREOF, the parties hereto have caused this
Auction Agency Agreement to be duly executed and delivered by their proper and
duly authorized officers as of the date first above written.
VAN XXXXXX XXXXXXX
MUNICIPAL TRUST
By /s/ Xxxxxx X. XxXxxxxxx
------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: President
BANKERS TRUST COMPANY
By /s/ Xxxx Xxxxxxxx
---------------------------------
Name: Xxxx Xxxxxxxx
Title: Assistant Treasurer
EXHIBIT A
FORM OF
BROKER-DEALER AGREEMENT
EXHIBIT B
FORM OF
MASTER PURCHASER'S LETTER
EXHIBIT C
SETTLEMENT PROCEDURES
EXHIBIT D
FORM OF APS PROVISIONS
EXHIBIT E
VAN XXXXXX XXXXXXX MUNICIPAL TRUST
NOTICE OF AUCTION DATE FOR
AUCTION PREFERRED SHARES
("APS")
NOTICE IS HEREBY GIVEN that the Auction Date of the next
Auction for the APS Series __ of VAN XXXXXX XXXXXXX MUNICIPAL TRUST (the "Fund")
is scheduled to be __ and the next Dividend Payment Date for the Fund's APS
Series __ will be __.
[A Failure to Deposit in respect of the APS Series __
currently exists. If such Failure to Deposit is not cured prior to 12:00 Noon on
the fourth Business Day prior to the next scheduled Auction Date of the APS
Series __ as defined, the next Auction will not be held. Notice of the next
Auction for the APS Series ___ will be delivered when such Failure to Deposit is
cured.(1)
VAN XXXXXX XXXXXXX
MUNICIPAL TRUST
--------
(1) Include this language if a Failure to Deposit exists.
EXHIBIT F
VAN XXXXXX XXXXXXX MUNICIPAL TRUST
NOTICE OF PROPOSED CHANGE OF
LENGTH OF RATE PERIOD OF
ACTION PREFERRED SHARES
("APS")
NOTICE IS HEREBY GIVEN that VAN XXXXXX XXXXXXX MUNICIPAL TRUST
(the "Fund") may exercise its option to designate the Rate Period of its APS
Series ___ commencing [the first day of the proposed Special Dividend Period]
as a Special Dividend Period.
By 11:00 A.M. on the second Business Day next preceding the
first day of such proposed Special Dividend Period, the Fund will notify Bankers
Trust Company of either (a) its determination to exercise such option,
designating the length of such Special Dividend Period and the terms of the
Specific Redemption Provisions, if any, for such series or (b) its determination
not to exercise such option.
VAN XXXXXX XXXXXXX
MUNICIPAL TRUST
Dated:
---------------------
EXHIBIT G
VAN XXXXXX XXXXXXX MUNICIPAL TRUST
NOTICE OF CHANGE OF LENGTH OF RATE PERIOD OF
AUCTION PREFERRED SHARES
("APS")
NOTICE IS HEREBY GIVEN that VAN XXXXXX XXXXXXX MUNICIPAL TRUST
(the "Fund") has determined to designate the Rate Period of its APS Series __
commencing on [the first day of the Special Dividend Period] as a Special
Dividend Period.
The Special Dividend Period will be __ [days] [year[s]].
The Auction Date for the Special Dividend Period is (the
Business Day next preceding the first day of such Special Dividend Period).
[Specific Redemption Provisions, if applicable.]
As a result of the Special Dividend Period designation, the
amount of dividends payable on APS Series __ during the Special Dividend Period
will be based on a 360-day year.
The Special Dividend Period shall not commence if (a) on such
Auction Date Sufficient Clearing Bids shall not exist or (b) if a Failure to
Deposit shall have occurred prior to the first day thereof with respect to
shares of such series of APS.
The scheduled Dividend Payment Dates for such series of APS
during such Special Dividend Period will be ___________________________.
VAN XXXXXX XXXXXXX
MUNICIPAL TRUST
Dated:
---------------------
EXHIBIT H
VAN XXXXXX XXXXXXX MUNICIPAL TRUST
NOTICE OF DETERMINATION NOT TO CHANGE
LENGTH OF RATE PERIOD OF
AUCTION PREFERRED SHARES
("APS")
NOTICE IS HEREBY GIVEN that VAN XXXXXX XXXXXXX MUNICIPAL TRUST
(the "Fund") has determined not to exercise its option to designate a Special
Dividend Period of its APS Series __ and the next succeeding Dividend Period of
such series will be a Minimum Rate Period of __ days.
VAN XXXXXX XXXXXXX
MUNICIPAL TRUST
Dated:
---------------------
EXHIBIT I
VAN XXXXXX XXXXXXX MUNICIPAL TRUST
NOTICE OF CURE OF
FAILURE TO DEPOSIT ON
AUCTION PREFERRED SHARES
("APS")
NOTICE IS HEREBY GIVEN that VAN XXXXXX XXXXXXX MUNICIPAL TRUST
(the "Fund") has cured its Failure to Deposit with respect to its APS Series __.
The dividend rate on the shares of APS Series __ for the current Dividend
Period is __% per annum, the Dividend Payment Date for the current Dividend
Period is scheduled to be __ and the next Auction Date is scheduled to be
__________________.
VAN XXXXXX XXXXXXX
MUNICIPAL TRUST
Dated:
---------------------
EXHIBIT J
VAN XXXXXX XXXXXXX MUNICIPAL TRUST
NOTICE OF SUBSEQUENT CURE OF
FAILURE TO DEPOSIT ON
AUCTION PREFERRED SHARES
("APS")
NOTICE IS HEREBY GIVEN that VAN XXXXXX XXXXXXX MUNICIPAL TRUST
(the "Fund") has cured its Failure to Deposit with respect to its APS Series __.
The next Auction Date for the APS Series __ is scheduled to be on _____________.
VAN XXXXXX XXXXXXX
MUNICIPAL TRUST
Dated:
---------------------
EXHIBIT K
VAN XXXXXX XXXXXXX MUNICIPAL TRUST
NOTICE OF
[CAPITAL GAINS] [AND] [TAXABLE ORDINARY INCOME](1)
DIVIDEND FOR
AUCTION PREFERRED SHARES
("APS")
NOTICE IS HEREBY GIVEN that the amount of the dividend payable
on ______________ for the APS Series __ of VAN XXXXXX XXXXXXX MUNICIPAL TRUST
(the "Fund") will be determined by the Auction to be held on . Up to [$__A__](2)
[$__B__](3) per share of the dividend payable on such date as determined by
such Auction will consist of [capital gains](2) [ordinary income taxable for
federal income tax purposes].(3) If the dividend amount payable on such date as
determined by such Auction is less than [$__A__]2 [$__B__](3) per share, the
entire amount of the dividend will consist of [capital gains](2)
------------------
(1) Include language with respect to capital gains, taxable ordinary income
or both, depending on the character of the designation to be made with
respect to the dividend(s).
(2) Include bracketed material if a portion of the dividend will be
designated capital gains.
(3) Include bracketed material if a portion of the dividend will be
designated ordinary income taxable for Federal income tax purposes and
no portion of the dividend will be designated capital gains.
[ordinary income taxable for federal income tax purposes](3). [To the extent
such dividend amount exceeds [$__A__] per share, any excess up to [$__B__] per
share will consist of ordinary income taxable for Federal income tax
purposes].(4) Accordingly, the aforementioned composition of the dividend
payable on ___________________________ should be considered in determining
Orders to be submitted with respect to the Auction to be held on
_____________________ . The Applicable Percentage in effect for such Auction
will be __%.
VAN XXXXXX XXXXXXX
MUNICIPAL TRUST
-----------------
(4) Include bracketed material if a portion of the dividend will be
designated capital gains and a portion will be designated ordinary
income taxable for Federal income tax purposes.
A = the maximum amount of capital gains allocated to such series
of APS to be included in such dividend, divided by the number
of shares of APS.
B = the maximum amount of ordinary income taxable for Federal
income tax purposes allocated to such series of APS to be
included in such dividend, divided by the number of shares in
such series.
2
