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AUCTION AGENT AGREEMENT
between
THE BLACKSTONE MUNICIPAL TARGET TERM TRUST INC.
and
BANKERS TRUST COMPANY
Dated as of November 21, 1991
Relating to
Auction Rate Municipal Preferred Stock (the "Preferred Shares")
Series W7, Series W28 and Series F7
of
THE BLACKSTONE MUNICIPAL TARGET TERM TRUST INC.
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THIS AUCTION AGENT AGREEMENT dated as of November 21, 1991,
between THE BLACKSTONE MUNICIPAL TARGET TERM TRUST INC., a Maryland
corporation (the "Company"), and BANKERS TRUST COMPANY, a New York banking
corporation.
The Company proposes to duly authorize and issue 1,500 shares
of Auction Rate Municipal Preferred Stock, Series W7, with a par value of
$.01 per share and a liquidation preference of $50,000 per share plus an
amount equal to accumulated but unpaid dividends (whether or not earned or
declared) plus the premium, if any, resulting from the designation of a
Premium Call Period ("Series W7 Preferred Shares"), 1,500 shares of
Auction Rate Municipal Preferred Stock, Series W28, with a par value of
$.01 per share and a liquidation preference of $50,000 per share plus an
amount equal to accumulated but unpaid dividends (whether or not earned or
declared) plus the premium, if any, resulting from the designation of a
Premium Call Period ("Series W28 Preferred Shares"), and 1,500 shares of
Auction Rate Municipal Preferred Stock, Series F7, with a par value of
$.01 per share and a liquidation preference of $50,000 per share plus an
amount equal to accumulated but unpaid dividends (whether or not earned or
declared) plus the premium, if any, resulting from the designation of a
Premium Call Period ("Series F7 Preferred Shares"), each pursuant to the
Company's Articles Supplementary (as defined below). The Series W7
Preferred Shares, the Series W28 Preferred Shares and the Series F7
Preferred Shares are sometimes herein together referred to as the
"Preferred Shares". A separate Auction (as defined below) will be
conducted for each series of Preferred Shares. The Company desires that
Bankers Trust Company perform certain duties as agent in connection with
each Auction of Preferred Shares (the "Auction Agent") and as the transfer
agent, registrar, dividend disbursing agent and redemption agent with
respect to the Preferred Shares (the "Paying Agent") upon the terms and
conditions of this Agreement, and hereby appoints Bankers Trust Company as
said Auction Agent and Paying Agent in accordance with those terms and
conditions (hereinafter generally referred to as the "Auction Agent"
except in Sections 3 and 4 below).
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein, the Company and the Auction Agent agree
as follows:
1. Definitions and Rules of Construction.
1.1 Terms Defined by Reference to Articles Supplementary.
Capitalized terms not defined herein shall have the respective
meanings specified in the Articles Supplementary.
1.2 Terms Defined Herein.
As used herein and in the Settlement Procedures (as defined
below), the following terms shall have the following meanings, unless the
context otherwise requires:
(a) "Affiliate" shall mean any Person made known to the
Auction Agent to be controlled by, in control of or under common control
with, the Company, or its successors.
(b) "Agent Member" of any Person shall mean such
Person's agent member of the Securities Depository who is identified as
such in such Person's Purchaser's Letter.
(c) "Articles Supplementary" shall mean the Articles
Supplementary of the Company, establishing the powers, preferences and
rights of the Series W7 Preferred Shares, the Series W28 Preferred Shares
and the Series F7 preferred Shares filed on November 20, 1991 in the
Office of the State Department of Assessments and Taxation of the State of
Maryland.
(d) "Auction" shall have the meaning specified in Section
2.1 hereof.
(e) "Auction Procedures" shall mean the Auction
Procedures that are set forth in Paragraph 11 of the Articles
Supplementary.
(f) "Authorized Officer" shall mean each Senior Vice
President, Vice President, Assistant Vice President, Trust Officer and
Assistant Secretary and Assistant Treasurer of the Auction Agent assigned
to its Corporate Trust and Agency Group and every other officer or
employee of the Auction Agent designated as an "Authorized Officer" for
purposes hereof in a communication to the Company.
(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) "Company Officer" shall mean the Chairman, 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 Company and every other officer or employee of the
Company designated as a "Company Officer" for purposes hereof in a notice
from the Company to the Auction Agent.
(i) "Holder" shall be a holder of record of one or more
shares of Series W7 Preferred Shares, Series W28 Preferred Shares or
Series F7 Preferred Shares, as the case may be, listed as such in the
stock register maintained by the Paying Agent pursuant to Section 4.6.
(j) "Purchaser's Letter" shall mean a letter addressed
to the Company, the Auction Agent and a Broker-Dealer, substantially in
the form attached to the Broker-Dealer Agreement as Exhibit A.
(k) "Settlement Procedures" shall mean the Settlement
Procedures attached to the Broker-Dealer Agreement 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," 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 Articles Supplementary provide that the
Applicable Rate on shares of Series W7 Preferred Shares, Series W28
Preferred Shares or Series F7 Preferred Shares, as the case may be, for
each Dividend Period therefor after the Initial Dividend Period shall be
the rate per annum that a commercial bank, trust company, or other
financial institution appointed by the Company advises results from
implementation of the Auction Procedures. The Board of Directors of the
Company has adopted a resolution appointing Bankers Trust Company as
Auction Agent for purposes of the Auction Procedures. The Auction Agent
hereby accepts such appointment and agrees that, on each Auction Date, it
shall follow the procedures set forth in this Section 2 and the Auction
Procedures for the purpose of determining the Applicable Rate for the
Series W7 Preferred Shares, the Series W28 Preferred Shares or the Series
F7 Preferred Shares, as the case may be, for the next Dividend Period
therefor. Each periodic operation of such procedures is hereinafter
referred to as 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 for Each Auction; Maintenance of Registry of
Beneficial Owners.
(a) At the time of closing of the initial issuance and
sale of the Preferred Shares (the "Closing"), the Company shall provide
the Auction Agent with a list of initial Broker-Dealers previously
approved by the Auction Agent and shall cause to be delivered to the
Auction Agent for execution by the Auction Agent a Broker-Dealer Agreement
signed by each such Broker-Dealer. Subsequent to the Closing and pursuant
to Section 2.5(b) and subject to Section 2.5(c) hereof, the Auction Agent
may, from time to time, designate additional Broker Dealers. The Auction
Agent shall keep the list of Broker Dealers current and accurate, and
shall indicate thereon, or on a separate list, the identity of each
Existing Holder, if any, whose most recent Order was submitted by a
Broker-Dealer on such list and resulted in such Existing Holder continuing
to hold or purchasing Preferred Shares. Not later than seven days prior to
any Auction Date for which any change in such list of Broker-Dealers is to
be effective, the Auction Agent shall notify the Company in writing of
such change and, if any such change is the addition of a Broker-Dealer to
such list, the Auction Agent shall have entered into a Broker-Dealer
Agreement with such additional Broker-Dealer prior to the participation of
any such Broker-Dealer in any Auction.
(b) (i) In the event that the Auction Date for any
Auction shall be changed after the Auction Agent shall have given the
notice referred to in clause (vii) of Paragraph (a) of the Settlement
Procedures, the Auction Agent, by such means as the Auction Agent deems
practicable, shall give notice of such change to the Broker-Dealers 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.
(ii) If, after the date of this Agreement, there is
any change in the prevailing rating of Preferred Shares by either of the
rating agencies (or substitute or successor rating agencies) referred to
in the definition of the Maximum Applicable Rate, thereby resulting in any
change in the corresponding percentage for the Preferred Shares, as set
forth in said definition (the "Percentage"), the Company shall notify the
Auction Agent in writing of such change in the Percentage prior to 9:00
A.M. on the Auction Date for Preferred Shares next succeeding such change.
The Percentage for the Preferred Shares on the date of this Agreement is
110%. The Auction Agent shall be entitled to rely on the last Percentage
of which it has received notice from the Company (or, in the absence of
such notice, the Percentage set forth in the preceding sentence) in
determining the Maximum Applicable Rate as set forth in Section 2.2(e)(i)
hereof.
(c) With respect to each Dividend Period that is a
Special Dividend Period, on or prior to the fourth day but not more than
seven days prior to an Auction Date for any series of the Preferred
Shares, the Company may, at its sole option and to the extent permitted by
law, by telephonic and written notice (a "Request for Special Dividend
Period") to the Auction Agent and to each Broker-Dealer, request that the
next succeeding Dividend Period for such series of Preferred Shares will
be a number of days (other than 7 in the case of the Series W7 and the
Series F7 Preferred Shares or 28 in the case of the Series W28 Preferred
Shares) evenly divisible by 7 and specified in such notice, provided that
for any Auction occurring after the initial Auction, the Company may not
give a Request for Special Dividend Period (and any such request shall be
null and void) unless sufficient Clearing Bids were made in the last
occurring Auction and unless full cumulative dividends, any amounts due
with respect to mandatory redemptions and any Additional Dividends payable
prior to such date have been paid in full. Such Request for Special
Dividend Period, in the case of a Dividend Period of 182 days or less,
shall be made on or prior to the 4th day but not more than 7 days prior to
an Auction Date for such series of Preferred Shares and, in the case of a
Dividend Period of more than 182 days, shall be given on or prior to the
14th day but not more than 28 days prior to an Auction Date for such
series of Preferred Shares. Upon receiving such Request for Special
Dividend Period, the Broker-Dealer(s) shall jointly determine whether
given the factors set forth in paragraph 2(c)(iii) of the Articles
Supplementary it is advisable that the Company issue a Notice of Special
Dividend Period for the particular series of Preferred Shares as
contemplated by such Request for Special Dividend Period and shall give
the Company and the Auction Agent written notice (a "Response") of such
determination by no later than the third day prior to such Auction Date.
If the Broker-Dealer(s) shall not give the Company and the Auction Agent a
Response by such third day or if the Response states that given the
factors referred to above it is not advisable that the Company give a
Notice of Special Dividend Period (as defined below) for the particular
series of Preferred Shares, the Company may not give a Notice of Special
Dividend Period in respect of such Request for Special Dividend Period. In
the event the Response indicates that it is advisable that the Company
give a Notice of Special Dividend Period for the particular series of
Preferred Shares, the Company will by no later than the second day prior
to such Auction Date give a notice (a "Notice of Special Dividend Period")
to the Auction Agent, the Securities Depository and each Broker-Dealer,
which notice will specify the duration of the Special Dividend Period the
Maximum Applicable Rate therefor and Specific Redemption Provisions, if
any. The Company shall not give a Notice of Special Dividend Period or
convert to a Special Dividend Period, or, if such Notice of Special
Dividend Period shall have already been given, shall give telephonic and
written notice of revocation (a "Notice of Revocation") to the Auction
Agent, each Broker-Dealer, and the Securities Depository on or prior to
the Business Day prior to the relevant Auction Date if it has not obtained
the advice in writing of Xxxxx'x and S&P or any [ILLEGIBLE] Rating Agency
that the proposed Special Dividend Period will not adversely affect their
then-current rating on the Preferred Shares (x) either the 1940 Act
Preferred Shares Coverage is not satisfied or the Company shall fail to
maintain S&P Eligible Assets and Xxxxx'x Eligible Assets each with an
aggregate Discounted Value at least equal to the Preferred Shares Basic
Maintenance Amount in each case on each of the two Valuation Dates
immediately preceding the Business Day prior to the relevant Auction Date
on an actual basis and on a pro forma basis giving effect to the proposed
Special Dividend Period (using as a pro forma dividend rate with respect
to such Special Dividend Period the dividend rate which the Broker-Dealers
shall advise the Company is an approximately equal rate for securities
similar to the Preferred Shares with an equal dividend period), (y)
sufficient funds for the payment of dividends payable on the immediately
succeeding Dividend Payment Date have not been irrevocably deposited with
the Auction Agent by the close of business on the third Business Day
preceding the related Auction Date or (z) the Broker-Dealer(s) jointly
advise the Company that after consideration of the factors referred to
above they have concluded that it is advisable to give a Notice of
Revocation. If the Company is prohibited from giving a Notice of Special
Dividend Period as a result of the factors enumerated in clause (x), (y)
or (z) of the preceding sentence or if the Company gives a Notice of
Revocation with respect to a Notice of Special Dividend Period, the next
succeeding Dividend Period will be a 7-day Dividend Period in the case of
the Series W7 and the Series F7 Preferred Shares and a 28-day Dividend
Period in the case of the Series W28 Preferred Shares, provided that if
the then-current Dividend Period in the case of the Series W28 Preferred
Shares is a Special Dividend Period of less than 28 days, the next
succeeding Dividend Period will be the same length as the current Dividend
Period. In addition, in the event sufficient Clearing Bids are not made in
any Auction or an Auction is not held for any reason, the next succeeding
Dividend Period will be a 7-day Dividend Period (in the case of Series W7
Preferred Shares and Series F7 Preferred Shares) or a 28-day Dividend
Period (in the case of Series W28 Preferred Shares) and the Company may
not again give a Notice of Special Dividend Period (and any such attempted
notice shall be null and void) until sufficient Clearing Bids have been
made in an Auction with respect to a 7-day Dividend Period (in the case of
Series W7 Preferred Shares and Series F7 Preferred Shares) or a 28-day
Dividend Period (in the case of Series W28 Preferred Shares).
(d) (i) Whenever the Company intends to include any net
capital gains or other taxable income in any dividend on Preferred Shares,
the Company will notify the Auction Agent of the amount to be so included
at least five Business Days prior to the Auction Date on which the
Applicable Rate for such dividend is to be established. Whenever the
Auction Agent receives such notice from the Company, it will in turn
notify each Broker Dealer, who, on or prior to such Auction Date, in
accordance with its Broker-Dealer Agreement, will notify its Existing
Holders and Potential Holders believed to be interested in submitting an
Order in the Auction to be held on such Auction Date.
(ii) If the Company makes a Retroactive Taxable
Allocation, the Company will, within 90 days (and generally within 60
days) after the end of its fiscal year for which a Retroactive Taxable
Allocation is made provide notice thereof to the Auction Agent and to each
holder of Preferred Shares (initially the Securities Depository) during
such fiscal year at such holder's address as the same appears or last
appeared on the stock books of the Company. The Company will, within 30
days after such notice is given to the Auction Agent, pay to the Auction
Agent (who will then distribute to such holders of Preferred Shares), a
cash amount equal to the aggregate Additional Dividend with respect to all
Retroactive Taxable Allocations made to such holders during the fiscal
year in question.
(e) (i) On each Auction Date, the Auction Agent shall
determine the "AA" Composite Commercial Paper Rate (or, in the case of an
Auction for a Special Dividend Period, the Special Dividend Period
Reference Rate) and the Maximum Applicable Rate. If the "AA" Composite
Commercial Paper Rate is not quoted on an interest basis but is quoted on
a discount basis, the Auction Agent shall convert the quoted rate to an
Interest Equivalent, as set forth in Paragraph 1 of the Articles
Supplementary; or, if the rate obtained by the Auction Agent is not quoted
on an interest or discount basis, the Auction Agent shall convert the
quoted rate to an interest rate after consultation with the Company as to
the method of such conversion. Not later than 9:30 A.M. on each Auction
Date for each series of Preferred Shares, the Auction Agent shall notify
the Company and the Broker-Dealers of the "AA" Composite Commercial Paper
Rate so determined and the Maximum Applicable Rate.
(ii) If the "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 the "AA" Composite Commercial Paper Rate, the Auction
Agent shall immediately notify the Company so that the Company 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 Company shall promptly advise the Auction Agent of any such
selection. If the Company does not select any such Substitute Commercial
Paper Dealer or Substitute Commercial Paper Dealers, then the rates shall
be supplied by the remaining Commercial Paper Dealer or Commercial Paper
Dealers.
(f) (i) The Auction Agent shall maintain by series a
current registry of the beneficial owners of the shares of each series of
Preferred Shares who shall constitute the Existing Holders for purposes of
each Auction. The Company shall use its best efforts to provide or cause
to be provided to the Auction Agent within ten days following the date of
Closing a list of the initial Existing Holders of Series W7 Preferred
Shares, Series W28 Preferred Shares and Series F7 Preferred Shares and the
respective Broker-Dealer of each such Existing Holder through which such
Existing Holder purchased such shares. The Auction Agent may rely upon, as
evidence of the identities of the Existing Holders, such list, the results
of each Auction and notices from any Existing Holder, the Agent Member of
any Existing Holder or the Broker-Dealer of any Existing Holder with
respect to such Existing Holder's transfer of any Preferred Shares to
another Person.
(ii) In the event of any partial redemption of any
Series W7 Preferred Shares, Series W28 Preferred Shares or Series F7
Preferred Shares, as the case may be, upon notice by the Company to the
Auction Agent of such partial redemption, the Auction Agent shall promptly
request the Securities Depository to notify the Auction Agent of the
identities of the Agent Members (and the respective numbers of Preferred
Shares) from the accounts of which Preferred Shares have been called for
redemption and the person or department at such Agent Member to contact
regarding such redemption and, at least two Business Days prior to the
next Auction with respect to Preferred Shares of the series being
partially redeemed, the Auction Agent shall request each Agent Member so
identified to disclose to the Auction Agent (upon selection by such Agent
Member of the Existing Holders whose Preferred Shares are to be redeemed)
the number of Preferred Shares of such series of Preferred Shares of each
such Existing Holder, if any, to be redeemed by the Company; provided that
the Auction Agent has been furnished with the name and telephone number of
a person or department at such Agent Member from which it is to request
such information. If necessary to procure such information, the Auction
Agent shall deliver to each Agent Member a facsimile copy of the
Purchaser's Letter of each Existing Holder represented by such Agent
Member, 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 Series W7 Preferred Shares, Series W28 Preferred Shares or Series F7
Preferred Shares shown in the Auction Agent's registry of beneficial
owners.
(iii) The Auction Agent shall register a transfer of the
beneficial ownership of shares of Series W7 Preferred Shares, Series W28
Preferred Shares or Series F7 Preferred Shares from an Existing Holder to
another Person only if such transfer is made to a Person that has
delivered a signed Purchaser's Letter to the Auction Agent and only if (A)
such transfer is pursuant to an Auction or (B) if such transfer is made
other than pursuant to an Auction, the Auction Agent has been notified in
writing 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. The Auction Agent is not required to accept any notice of
transfer delivered for an Auction unless it is received by the Auction
Agent by 3:00 P.M. on the Business Day next preceding the applicable
Auction Date. The Auction Agent shall rescind a transfer made on the
registry of the beneficial owners of any Preferred Shares if the Auction
Agent has been notified in writing in a notice substantially in the form
of Exhibit E to the Broker-Dealer Agreement by the Agent Member or the
Broker-Dealer of any Person that (i) purchased any Preferred Shares and
the seller failed to deliver such shares or (ii) sold any Preferred Shares
and the purchaser failed to make payment to such Person upon delivery to
the purchaser of such shares.
(g) The Auction Agent may request that the
Broker-Dealers, as set forth in Section 3.2(c) of the Broker-Dealer
Agreements, 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 Preferred Shares. The Auction Agent shall keep
confidential any such information and shall not disclose any such
information so provided to any Person other than the relevant
Broker-Dealer and the Company provided that the Auction Agent reserves the
right to disclose any such information if it is advised by its counsel
that its failure to do so would be unlawful.
2.3 Auction Schedule.
The Auction Agent shall conduct Auctions for each series of
Preferred Shares in accordance with the schedule set forth below. Such
schedule may be changed by the Auction Agent with the consent of the
Company, which consent shall not be unreasonably withheld. The Auction
Agent shall give notice of any such change to each Broker-Dealer. Such
notice shall be received prior to the first Auction Date on which any such
change shall be effective.
Time Event
---- -----
By 9:30 A.M. Auction Agent advises the Company
and the Broker-Dealers of the
applicable "AA" Composite
Commercial Paper Rate (or in the
case of a Special Dividend Period,
the Special Dividend Period
Reference Rate) and the Maximum
Applicable Rate as set forth in
Section 2.2(e)(i) hereof.
9:30 A.M. - 1:00 P.M. Auction Agent assembles
information communicated to it by
Broker-Dealers as provided in
Paragraph 11(c)(i) of the Articles
Supplementary. Submission deadline
is 1:00 P.M.
Not earlier than Auction Agent makes determination
1:00 P.M. pursuant to Paragraph 11(d)(i) of the
Articles Supplementary.
By approximately Auction Agent advises Company of
3:00 P.M. results of Auction as provided in
Paragraph 11(d)(ii) of the
Articles Supplementary.
Submitted Bids and Submitted Sell
Orders are accepted and rejected
in whole or in part and shares of
Preferred Shares allocated as
provided in Paragraph 11(e) of the
Articles Supplementary.
Auction Agent gives notice of
Auction results as set forth in
Section 2.4 hereof.
2.4 Notice of Auction Results.
On each Auction Date, the Auction Agent shall notify
Broker-Dealers of the results of the Auction held on such date by
telephone or through the Auction Agent's Auction Processing System as set
forth in Paragraph (a) of the Settlement Procedures.
2.5 Broker-Dealers.
(a) Not later than 12:00 noon on each Auction Date for
each series of Preferred Shares, the Company shall pay to the Auction
Agent in New York Clearing House or similar next-day funds an amount in
cash equal to, (i) in the case of any Auction Date immediately preceding
any Dividend Period of 364 days or less, the product of (A) a fraction the
numerator of which is the number of days in such Dividend Period
(calculated by counting the first day of such Dividend Period but
excluding the last day thereof) and the denominator of which is 360, times
(B) 1/4 of 1%, times (C) $50,000, times (D) the sum of the aggregate
number of Outstanding shares of such series of Preferred Shares for which
the Auction is conducted and (ii) in the case of any Auction Date
immediately preceding any Dividend Period of more than 364 days, the
amount determined by mutual consent of the Company and the Broker-Dealer
or Broker-Dealers pursuant to Section 3.5 of the Broker-Dealer Agreements.
The Auction Agent shall apply such monies as set forth in Section 3.5 of
the Broker-Dealer Agreements and shall thereafter remit to the Company any
remaining funds paid to the Auction Agent pursuant to this Section 2.5(a).
(b) Subject to Section 2.5(c) hereof, the Auction Agent
is hereby authorized by the Company to designate at any time or from time
to time any Person to act as a Broker-Dealer without the prior written
approval of the Company. The Auction Agent may designate an Affiliate of
the Company or of itself to act as a Broker-Dealer subject to Section
2.5(c) hereof.
(c) The Auction Agent shall terminate any Broker-Dealer
Agreement as set forth therein if so directed by the Company.
(d) Notwithstanding Section 2.5(b) hereof, no person may
act as a Broker-Dealer unless such person shall have entered into a
Broker-Dealer Agreement with the Auction Agent.
(e) The Auction Agent shall maintain a list of
Broker-Dealers.
2.6 Ownership of Shares of Series W7 Preferred Shares, Series W28
Preferred Shares and Series F7 Preferred Shares and Submission
of Bids by Company and Affiliates.
Neither the Company nor any Affiliate of the Company may
submit any Sell Order or Bid, directly or indirectly, in any Auction,
except that an Affiliate of the Company that is a Broker-Dealer may submit
a Sell Order or Bid on behalf of an Existing Holder or Potential Holder.
The Company shall notify the Auction Agent if the Company or, to the best
of the Company's knowledge, any Affiliate of the Company becomes an
Existing Holder of any Preferred Shares. Any Preferred Shares redeemed,
purchased or otherwise acquired (i) by the Company shall not be reissued
or (ii) by its Affiliates shall not be transferred (other than to the
Company). The Auction Agent shall have no duty or liability with respect
to enforcement of this Section 2.6.
2.7 Access to and Maintenance of Auction Records.
The Auction Agent shall afford to the Company, its agents,
independent public accountants and counsel, access at reasonable times
during normal business hours to review and make extracts or copies (at the
Company's sole cost and expense) of all books, records, documents and
other information concerning the conduct and results of Auctions, provided
that any such agent, accountant, or counsel shall furnish the Auction
Agent with a letter from the Company requesting that the Auction Agent
afford such person access. The Auction Agent shall maintain records
relating to any Auction for a period of two years after such Auction
(unless requested by the Company to maintain such records for such longer
period not in excess of four years, then for such longer period), and such
records shall, in reasonable detail, accurately and fairly reflect the
actions taken by the Auction Agent hereunder. The Company agrees to keep
any information regarding the customers of any Broker-Dealer received from
the Auction Agent in connection with this Agreement or any Auction
confidential and shall not disclose such information or permit the
disclosure of such information without the prior written consent of the
applicable Broker-Dealer to anyone except such agent, accountant or
counsel engaged to audit or review the results of Auctions as permitted by
this Section 2.7. Any such agent, accountant or counsel, before having
access to such information, shall agree to keep such information
confidential and not to disclose such information or permit disclosure of
such information without the prior written consent of the applicable
Broker-Dealer.
3. The Auction Agent as Paying Agent.
3.1 Paying Agent.
The Board of Directors of the Company has adopted a resolution
appointing Bankers Trust Company as transfer agent, registrar, dividend
disbursing agent and redemption agent for the Company in connection with
any Preferred Shares (the "Paying Agent"). The Paying Agent hereby accepts
such appointment and agrees to act in accordance with its standard
procedures and the provisions of the Articles Supplementary which are
specified herein as Paying Agent with respect to the Preferred Shares and
as set forth in this Section 3.
3.2 The Company's Notices to Paying Agent.
Whenever any Preferred Shares are to be redeemed, the Company
shall promptly deliver to the Paying Agent the Notice of Redemption, which
will be mailed by the Company to each Holder, at least five days prior to
the date such Notice of Redemption is required to be mailed by the
Articles Supplementary. The Paying Agent shall have no responsibility to
confirm or verify the accuracy of any such notice.
3.3 Company to Provide Funds for Dividends and Redemptions and
Additional Dividends
(a) Not later than noon, on the Business Day immediately
preceding each Dividend Payment Date, the Company shall deposit with the
Paying Agent an aggregate amount of New York Clearing House or similar
next-day funds equal to the declared dividends to be paid to Holders on
such Dividend Payment Date and shall give the Paying Agent irrevocable
instructions to apply such funds to the payment of such dividends on such
Dividend Payment Date.
(b) If the Company shall give the Notice of Redemption
then, by noon of the Business Day immediately preceding the date fixed for
redemption, the Company shall deposit in trust with the Paying Agent an
aggregate amount of New York Clearing House or similar next day funds
sufficient to redeem such Preferred Shares called for redemption and shall
give the Paying Agent irrevocable instructions and authority to pay the
redemption price to the Holders of Preferred Shares called for redemption
upon surrender of the certificate or certificates therefor.
(c) If the Company provides notice to the Auction Agent
of a Retroactive Taxable Allocation, the Company shall, within 30 days
after such notice is given and by noon of the Business Day immediately
preceding the date fixed for payment of an Additional Dividend, deposit in
trust with the Paying Agent an aggregate amount of New York Clearing House
or similar next-day funds equal to such Additional Dividend and shall give
the Paying Agent irrevocable instructions and authority to pay the
Additional Dividends to Holders (or former Holders) of Preferred Shares
entitled thereto.
3.4 Disbursing Dividends, Redemption Price and Additional
Dividends.
After receipt of the New York Clearing House or similar
next-day funds and instructions from the Company described in Sections
3.3(a), (b) and (c) above, the Paying Agent shall pay to the Holders (or
former Holders) entitled thereto (i) on each corresponding Dividend
Payment Date, dividends on the Series W7 Preferred Shares, Series W28
Preferred Shares or Series F7 Preferred Shares, as the case may be, (ii)
on any date fixed for redemption, the redemption price of any Preferred
Shares called for redemption and (iii) on the date fixed for payment of an
Additional Dividend, such Additional Dividend. The amount of dividends for
any Dividend Period to be paid by the Paying Agent to Holders will be
determined by the Company as set forth in Paragraph 2 of the Articles
Supplementary. The redemption price to be paid by the Paying Agent to the
Holders of any Preferred Shares called for redemption will be determined
as set forth in Paragraph 4 of the Articles Supplementary. The amount of
Additional Dividends to be paid by the Paying Agent in the event of a
Retroactive Taxable Allocation to Holders will be determined by the
Company pursuant to paragraph 2(e) of the Articles Supplementary. The
Company shall notify the Paying Agent in writing of a decision to redeem
any Preferred Shares on or prior to the date specified in Section 3.2
above, and such notice by the Company to the Paying Agent shall contain
the information required to be stated in the Notice of Redemption required
to be mailed by the Company to such Holders. The Paying Agent shall have
no duty to determine the redemption price and may rely on the amount
thereof set forth in the Notice of Redemption.
4. The Paying Agent as Transfer Agent and Registrar.
4.1 Original Issue of Stock Certificates.
On the Date of Original Issue, one certificate for all shares
of Series W7 Preferred Shares, one certificate for all shares of Series
W28 Preferred Shares and one certificate for all shares of Series F7
Preferred Shares shall be issued by the Company and registered in the name
of Cede & Co., as nominee of the Securities Depository, and countersigned
by the Paying Agent.
4.2 Registration of Transfer or Exchange of Preferred Shares.
Except as provided in this Section 4.2, the shares of each
series of Preferred Shares shall be registered solely in the name of the
Securities Depository or its nominee. If the Securities Depository shall
give notice of its intention to resign as such, and if the Company shall
not have selected a substitute Securities Depository acceptable to the
Paying Agent prior to such resignation, then upon such resignation, the
shares of each series of Preferred Shares may, at the Company's request,
be registered for transfer or exchange, and new certificates thereupon
shall be issued in the name of the designated transferee or transferees,
upon surrender of the old certificates in form deemed by the Paying Agent
properly endorsed for transfer with (a) all necessary endorsers'
signatures guaranteed in such manner and form as the Paying Agent may
require by a guarantor reasonably believed by the Paying Agent to be
responsible, (b) such assurances as the Paying Agent shall deem necessary
or appropriate to evidence the genuineness and effectiveness of each
necessary endorsement and (c) satisfactory evidence of compliance with all
applicable laws relating to the collection of taxes or funds necessary for
the payment of such taxes. If the certificates for Preferred Shares are
not held by the Securities Depository or its nominee, payments upon
transfer of shares in an Auction shall be made in same-day funds to the
Auction Agent against delivery of certificates therefor.
4.3 Removal of Legend.
Any request for removal of a legend indicating a restriction
on transfer from certificates evidencing shares of Series W7 Preferred
Shares, Series W28 Preferred Shares or Series F7 Preferred Shares shall be
accompanied by an opinion of counsel stating that such legend may be
removed and such shares transferred free of the restriction described in
such legend, said opinion to be delivered under cover of a letter from a
Company Officer authorizing the Paying Agent to remove the legend on the
basis of said opinion.
4.4 Lost Stock Certificates.
The Paying 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 Company and the Paying Agent, subject at all times to
provisions of law, the By-Laws of the Company governing such matters and
resolutions adopted by the Company with respect to lost securities. The
Paying Agent may issue new certificates in exchange for and upon the
cancellation of mutilated certificates. Any request by the Company to the
Paying 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
Company to the Paying Agent that such issuance will comply with such
provisions of applicable law and the By-Laws and resolutions of the
Company.
4.5 Disposition of Cancelled Certificates; Record Retention.
The Paying Agent shall retain stock certificates which have
been cancelled in transfer or in exchange and accompanying documentation
in accordance with applicable rules and regulations of the Securities and
Exchange Commission for two calendar years from the date of such
cancellation. The Paying Agent shall afford to the Company, its agents and
counsel access at reasonable times during normal business hours to review
and make extracts or copies (at the Company's sole cost and expense) of
such certificates and accompanying documentation. Upon the expiration of
this two-year period, the Paying Agent shall deliver to the Company the
cancelled certificates and accompanying documentation. The Company shall,
at its expense, retain such records for a minimum additional period of
four calendar years from the date of delivery of the records to the
Company and shall make such records available during this period at any
time, or from time to time, for reasonable periodic, special, or other
examinations by representatives of the Securities and Exchange Commission.
The Company shall also undertake to furnish to the Securities and Exchange
Commission, upon demand, at either the principal office or at any regional
office, complete, correct and current hard copies of any and all such
records. Thereafter such records shall not be destroyed by the Company
without the approval of the Paying Agent, which shall not be unreasonably
withheld, but will be safely stored for possible future reference.
4.6 Stock Register.
The Paying Agent shall maintain the stock register, which
shall contain a list of the Holders, the number of Preferred Shares held
by each Holder and the address of each Holder. The Paying Agent shall
record in the stock register any change of address of a Holder upon notice
by such Holder. In case of any request or demand for the inspection of the
stock register or any other books of the Company in the possession of the
Paying Agent, the Paying Agent will notify the Company and secure
instructions as to permitting or refusing such inspection. The Paying
Agent reserves the right, however, to exhibit the stock register or other
records to any person in case it is advised by its counsel that its
failure to do so would (i) be unlawful or (ii) expose it to liability,
unless the Company shall have offered indemnification satisfactory to the
Paying Agent.
4.7 Return of Funds.
Any funds deposited with the Paying Agent by the Company for
any reason under this Agreement, including for the payment of dividends or
the redemption of shares of any series of Preferred Shares, that remain
with the Paying Agent after 12 months shall be repaid to the Company upon
the written request of the Company.
5. Representations and Warranties.
(a) The Company represents and warrants to the Auction
Agent that:
(i) the Company is a duly incorporated and validly
existing corporation in good standing under the laws of the State of
Maryland and has full power to execute and deliver this Agreement and to
authorize, create and issue the shares of Series W7 Preferred Shares, the
shares of Series W28 Preferred Shares and the shares of Series F7
Preferred Shares;
(ii) the Company is registered with the Securities and
Exchange Commission under the Investment Company Act of 1940, as amended,
as a closed-end, diversified management investment company;
(iii) this Agreement has been duly and validly
authorized, executed and delivered by the Company and constitutes the
legal, valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, subject as to such
enforceability to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to
general equitable principles;
(iv) the forms of the certificates evidencing the shares
of Series W7 Preferred Shares, the shares of Series W28 Preferred Shares
and the shares of Series F7 Preferred Shares comply with all applicable
laws of the State of Maryland;
(v) the shares of Series W7 Preferred Shares, the shares
of Series W28 Preferred Shares and the shares of Series F7 Preferred
Shares have been duly and validly authorized by the Company and, upon
completion of the initial sale of the shares of each series of Pre-
ferred Shares and receipt of payment therefor, will be validly issued,
fully paid and nonassessable;
(vi) the offering of the shares of Series W7 Preferred
Shares, the shares of Series W28 Preferred Shares and the shares of Series
F7 Preferred Shares has been registered under the Securities Act of 1933,
as amended, and no 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 this Agreement or the issuance of the
shares of any such series of Preferred Shares except as required by
applicable state securities or insurance laws, all of which have been
taken;
(vii) the execution and delivery of this Agreement and
the issuance and delivery of the shares of Series W7 Preferred Shares, the
shares of Series W28 Preferred Shares and the shares of Series F7
Preferred Shares 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 Charter or the By-Laws of the Company, any law or
regulation applicable to the Company, any order or decree of any court or
public authority having jurisdiction over the Company, or any mortgage,
indenture, contract, agreement or undertaking to which the Company is a
party or by which it is bound; and
(viii) no taxes are payable upon or in respect of the
execution of this Agreement or the issuance of the shares of any series of
Preferred Shares.
(b) The Auction Agent represents and warrants to the
Company that the Auction Agent is duly organized and is validly existing
as a banking corporation in good standing under the laws of the State of
New York and has the corporate power to enter into and perform its
obligations under this Agreement.
6. The Auction Agent.
6.1 Duties and Responsibilities.
(a) The Auction Agent is acting solely as agent for the
Company hereunder and owes no fiduciary duties to any Person except as
provided by this Agreement.
(b) The Auction Agent undertakes to perform such duties
and only such duties as are specifically set forth in this Agreement, and
no implied covenants or obligations shall be read into this Agreement
against the Auction Agent.
(c) In the absence of bad faith or 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. The Auction Agent shall not be liable for
any error of judgment made in good faith unless the Auction Agent shall
have been negligent in ascertaining (or failing to ascertain) the
pertinent facts.
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 reasonably 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 Company or by a Broker-Dealer. The Auction Agent may record
telephone communications with the Company or with the Broker-Dealers or
both.
(b) The Auction Agent may consult with counsel of its
choice, and the written 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.
6.3 Auction Agent's Disclaimer.
The Auction Agent makes no representation as to the validity
or adequacy of this Agreement, the Broker-Dealer Agreements or the
Preferred Shares.
6.4 Compensation, Expenses and Indemnification.
(a) The Company 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.
(b) The Company 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, expenses and disbursements of its agents and counsel),
except any expense, disbursement and advances attributable to its
negligence or bad faith.
(c) The Company shall indemnify the Auction Agent for,
and hold it harmless against, any loss, liability or expense incurred
without 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
any of its duties hereunder and thereunder, except such as may result from
its negligence or bad faith.
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 Company may
terminate this Agreement at any time by so notifying the Auction Agent,
provided that if any Preferred Shares remain outstanding the Company 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 prior notice to the Company on the date specified in such notice,
which shall be no earlier than 60 days after the delivery of such notice.
If the Auction Agent resigns while any shares of Preferred Shares remain
outstanding, the Company shall use its best efforts to enter into an
agreement with a successor auction agent containing substantially the same
terms and conditions as this Agreement.
(b) Except as otherwise provided in this Section 7.1(b),
the respective rights and duties of the Company and the Auction Agent
under this Agreement shall cease upon termination of this Agreement. The
Company's representations, warranties, covenants and obligations to the
Auction Agent under Sections 5 and 6.4 hereof shall survive the
termination hereof. Upon termination of this Agreement, the Auction Agent
shall (i) resign as Auction Agent under the Broker-Dealer Agreements, (ii)
at the Company's request, promptly deliver to the Company copies of all
books and records maintained by it in connection with its duties
hereunder, and (iii) at the request of the Company, promptly transfer to
the Company or any successor auction agent any funds deposited by the
Company with the Auction Agent (whether in its capacity as Auction Agent
or Paying Agent) pursuant to this Agreement which have not previously been
distributed by the Auction Agent in accordance with this Agreement.
7.2 Communications.
Except for (i) communications authorized to be made by
telephone pursuant to this Agreement or the Auction Procedures and (ii)
communications in connection with Auctions (other than those expressly
required to be in writing), all notices, requests and other communications
to any party hereunder shall be in writing (including telecopy or similar
writing) and shall be given to such party addressed to it at its address,
or telecopy number set forth below:
If to the Company, addressed: The Blackstone Municipal Target
Term Trust Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Treasurer
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
If to the Auction Bankers Trust Company
Agent, addressed 0 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Auction Rate Securities
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
or such other address or telecopy number as such party may hereafter
specify for such purpose by notice to the other party. Each such notice,
request or communication shall be effective when delivered at the address
specified herein. Communications shall be given on behalf of the Company by
a Company Officer and on behalf of the Auction Agent by an Authorized Officer.
7.3 Entire Agreement.
This Agreement contains the entire agreement between 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 the compensation of the
Auction Agent.
7.4 Benefits.
Nothing herein, express or implied, shall give to any Person,
other than the Company, 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 Company shall notify the Auction Agent of
any change in the Articles Supplementary 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 right or remedy with respect to
any subsequent breach.
7.6 Successor and Assigns.
This Agreement shall be binding upon, inure to the benefit of,
and be enforceable by, the respective successors and permitted assigns of
each of the Company and the Auction Agent. This Agreement may not be
assigned by either party hereto absent the prior written consent of the
other party, which consent shall not be unreasonably withheld.
7.7 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.
7.8 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.
7.9 Governing Law.
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements
made and to be performed in said state.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly
authorized officers as of the date first above written.
THE BLACKSTONE MUNICIPAL
TARGET TERM TRUST INC.
By: /s/ [ILLEGIBLE]
--------------------------------
Title:
BANKERS TRUST COMPANY
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------
XXXX X. XXXXXXXX
Title: ASSISTANT TREASURER
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly
authorized officers as of the date first above written.
THE BLACKSTONE MUNICIPAL
TARGET TERM TRUST INC.
By: /s/ [ILLEGIBLE]
---------------------------------
Title:
BANKERS TRUST COMPANY
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------
XXXX X. XXXXXXXX
Title: ASSISTANT TREASURER
