EVERGREEN INCOME ADVANTAGE FUND
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Auction Agent
-----------------------
FORM OF BROKER-DEALER AGREEMENT
dated as of April [ ], 2003
Relating to
Auction Market Preferred Shares ("AMPS")
Series M28
Series W28
Series T7
Series W7
Series TH7
and Series F7
of
EVERGREEN INCOME ADVANTAGE FUND
---------------------------
XXXXXXX XXXXX, XXXXXX XXXXXX & XXXXX INCORPORATED
BROKER-DEALER AGREEMENT
This Broker-Dealer Agreement dated as of April [ ], 2003, is between
DEUTSCHE BANK TRUST COMPANY AMERICAS, a New York banking corporation (the
"Auction Agent") (not in its individual capacity, but solely as agent of
EVERGREEN INCOME ADVANTAGE FUND (the "Fund"), pursuant to authority granted to
it in the Auction Agency Agreement dated as of April [ ], 2003, between the Fund
and the Auction Agent (the "Auction Agency Agreement") and XXXXXXX XXXXX, XXXXXX
XXXXXX & XXXXX INCORPORATED (together with its successors and assigns, "BD").
The Fund proposes to issue six series of auction market preferred
shares, par value $[ ] per share, designated Series M28 Preferred Shares,
liquidation preference $25,000 per share, Series W28 Preferred Shares,
liquidation preference $25,000 per share, Series T7 Preferred Shares,
liquidation preference $25,000 per share, Series W7 Preferred Shares,
liquidation preference $25,000 per share, Series TH7 Preferred Shares,
liquidation preference $25,000 per share, Series F7 Preferred Shares,
liquidation preference $25,000 per share, (collectively, the "AMPS"), pursuant
to the Fund's Statement of Preferences (as defined below).
The Fund's Statement of Preferences provides that for each subsequent
Dividend Period of AMPS then outstanding, the Applicable Rate for each series of
AMPS for each subsequent Dividend Period shall be equal to the rate per annum
that results from an Auction for Outstanding shares of each Series on the
respective Auction Date therefor next preceding the period from and after the
Date of Original Issue to and including the last day of the initial Dividend
Period. The Board of Directors of the Fund has adopted a resolution appointing
Deutsche Bank Trust Company Americas as Auction Agent for purposes of the
Auction Procedures, and pursuant to Section 2.5 of the Auction Agency Agreement,
the Fund has requested and directed the Auction Agent to execute and deliver
this Agreement.
The Auction Procedures require the participation of one or more
Broker-Dealers.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the Auction Agent and BD agree as follows:
I. DEFINITIONS AND RULES OF CONSTRUCTION.
1.1 Terms Defined by Reference to the Statement of Preferences.
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Capitalized terms not defined herein shall have the respective meanings
specified in the Statement of Preferences.
1.2 Terms Defined Herein.
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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.
(b) "Auction" shall have the meaning specified in Section 2.1 of the
Auction Agency Agreement.
(c) "Auction Procedures" shall mean the Auction Procedures that are set
forth in Part II of the Statement of Preferences.
(d) "Authorized Officer" of the Auction Agent shall mean each Vice
President, Assistant Vice President and Associate of the Auction Agent and every
other officer or employee of the Auction Agent designated as an "Authorized
Officer" for purposes of this Agreement in a written communication to BD.
(e) "BD Officer" shall mean each officer or employee of BD designated as a
"BD Officer" for purposes of this Agreement in a communication to the Auction
Agent.
(f) "Broker-Dealer Agreement" shall mean this Agreement and any
substantially similar agreement between the Auction Agent and a Broker-Dealer.
(g) "Settlement Procedures" shall mean the Settlement Procedures attached
hereto as Exhibit D.
(h) "Statement of Preferences" shall mean the Statement of Preferences for
Preferred Shares of the Fund dated as of [ ], 2003 specifying the powers,
preferences and rights of the AMPS.
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.
(e) Sections I, II, and III hereof shall be read in conjunction with the
Statement of Preferences and in the event of any conflict with the Statement of
Preferences, the Statement of Preferences shall take precedence.
II.NOTIFICATION OF DIVIDEND.
The provisions contained in Section 3 of Part I of the Statement of
Preferences concerning the notification of a Special Dividend Period will be
followed by the Auction Agent and BD, and the provisions contained therein are
incorporated herein by reference in their entirety and shall be deemed to be a
part of this Agreement to the same extent as if such provisions were set forth
fully herein.
III. THE AUCTION.
3.1 Purpose; Incorporation by Reference of Auction Procedures and
Settlement Procedures.
(a) On each Auction Date, the provisions of the Auction Procedures will be
followed by the Auction Agent for the purpose of determining the Applicable Rate
for the AMPS, for each Dividend Period. 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 of this Agreement to the same extent as if such
provisions were set forth fully herein.
(c) BD agrees to act as, and assumes the obligations of and limitations and
restrictions placed upon, a Broker-Dealer under this Agreement. BD understands
that other Persons meeting the requirements specified in the definition of
"Broker-Dealer" contained in the Statement of Preferences may execute a
Broker-Dealer Agreement and participate as Broker-Dealers in Auctions.
(d) BD and other Broker-Dealers may participate in Auctions for their own
accounts. However, the Fund, by notice to BD and all other Broker-Dealers, may
prohibit all Broker-Dealers from submitting Bids in Auctions for their own
accounts, provided that Broker-Dealers may continue to submit Hold Orders and
Sell Orders.
3.2 Preparation for Each Auction.
----------------------------
(a) Not later than 9:30 A.M. on each Auction Date for the AMPS, the Auction
Agent shall advise BD by telephone or other electronic means of communication
acceptable to the parties of the Maximum Rate and the Reference Rate(s) in
effect on such Auction Date.
(b) The Auction Agent from time to time may, but shall not be obligated to,
request BD to provide it with a list of the respective customers BD believes are
Beneficial Owners of AMPS. BD shall comply with any such request, and the
Auction Agent shall keep confidential any such information, including
information received as to the identity of Bidders in any Auction, and shall not
disclose any such information so provided to any Person other than the Fund; and
such information shall not be used by the Auction Agent or its officers,
employees, agents or representatives for any purpose other than such purposes as
are described herein; provided, however, that the Auction Agent reserves the
right and is authorized to disclose any such information if (a) it is ordered to
do so by a court of competent jurisdiction or a regulatory body, judicial or
quasi-judicial agency or authority having the authority to compel such
disclosure, (b) it is advised by its counsel that its failure to do so would be
unlawful or (c) failure to do so would expose the Auction Agent to loss,
liability, claim, damage, or expense for which it has not received indemnity or
security satisfactory to it. In the event that the Auction Agent is required to
disclose information in accordance with the foregoing sentence, it shall provide
written notice of such requirement to BD as promptly as practicable. The Auction
Agent shall, subject to the terms of the Auction Agency Agreement, transmit any
list of customers BD believes are Beneficial Owners of AMPS and information
related thereto only to its officers, employees, agents or representatives who
need to know such information for the purposes of acting in accordance with this
Agreement, and the Auction Agent shall prevent the transmission of such
information to others and shall cause its officers, employees, agents and
representatives to abide by the foregoing confidentiality restrictions;
provided, however, that the Auction Agent shall have no responsibility or
liability for the actions of any of its officers, employees, agents or
representatives after they have left the employ of the Auction Agent.
3.3 Auction Schedule; Method of Submission of Orders.
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(a) The Fund and the Auction Agent shall conduct Auctions for AMPS in
accordance with the schedule set forth below. Such schedule may be changed
at any time by the Auction Agent with the consent of the Fund, which
consent shall not be withheld unreasonably. The Auction Agent shall give
written notice of any such change to BD, which shall have the right to
review such change. Such notice shall be received one Business Day prior to
the first Auction Date on which any such change shall be effective.
Time Event
By 9:30 A.M. Auction Agent shall advise
the Fund and the Broker-Dealers of
the Maximum Rate and the Reference
Rate(s) as set forth in Section
3.2(a) hereof.
9:30 A.M. - 1:30 P.M. Auction Agent shall assemble
information communicated to it by
Broker-Dealers as provided in Section
3(a) of Part II of the Statement of
Preferences. Submission Deadline is
1:30 P.M.
Not earlier than 1:30 P.M. Auction Agent shall make
determinations pursuant to Section
3(a) of Part II of the Statement of
Preferences.
By approximately 3:30 P.M. Auction Agent shall advise the
Fund of the results of the Auction as
provided in Section 3(b) of Part II
of the Statement of Preferences.
Submitted Bids and Submitted Sell
Orders will be accepted and rejected
in whole or in part and AMPS will be
allocated as provided in Section 4 of
Part II of the Statement of
Preferences.
Auction Agent shall give notice of
the Auction results as set forth in
Section 3.4(a) hereof.
(b) BD may designate one or more individuals in its organization who
will coordinate its procedures in connection with Auctions and purchases
and sales of the AMPS.
(c) BD agrees to maintain a list of Potential Beneficial Owners and,
subject to existing laws and regulations, to contact the Potential
Beneficial Owners on such list whom BD believes may be interested in
participating in the Auction on or prior to each Auction Date for the
purposes set forth in Section 2 of Part II of the Statement of Preferences.
Nothing herein shall require BD to submit an order for any Potential
Beneficial Owner in any Auction.
(d) BD shall submit Orders to the Auction Agent in writing in
substantially the form attached hereto as Exhibit A. BD shall submit
separate Orders to the Auction Agent for each Potential Beneficial Owner or
Beneficial Owner on whose behalf BD is submitting an Order and shall not
net or aggregate the Orders of Potential Beneficial Owners or Beneficial
Owners on whose behalf BD is submitting Orders.
(e) BD shall deliver to the Auction Agent (i) a written notice,
substantially in the form attached hereto as Exhibit B, of transfers of
AMPS, made through BD by an Existing Holder to another Person other than
pursuant to an Auction, and (ii) a written notice, substantially in the
form attached hereto as Exhibit C, of the failure of AMPS to be transferred
to or by any Person that purchased or sold AMPS through BD pursuant to an
Auction. The Auction Agent is not required to accept any notice delivered
pursuant to the terms of the foregoing sentence with respect to 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.
3.4 Notice of Auction Results.
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(a) On each Auction Date, the Auction Agent shall notify BD, by
telephone or other electronic means acceptable to the parties, of the
results of the Auction. On the Business Day next succeeding such Auction
Date, the Auction Agent shall notify BD in writing of the disposition of
all Orders submitted by BD in the Auction held on such Auction Date.
(b) BD shall notify each Beneficial Owner, Potential Beneficial Owner,
Existing Holder or Potential Holder on whose behalf BD has submitted an
Order, and take such other action as is required of BD.
If any Beneficial Owner or Existing Holder selling AMPS in an Auction
fails to deliver such shares, the Broker-Dealer of any Person that was to have
purchased AMPS in such Auction may deliver to such Person a number of whole
shares of AMPS that is less than the number of shares that otherwise was to be
purchased by such Person. In such event, the number of AMPS to be so delivered
shall be determined by such Broker-Dealer. Delivery of such lesser number of
shares shall constitute good delivery. Upon the occurrence of any such failure
to deliver shares, such Broker-Dealer shall deliver to the Auction Agent the
notice required by Section 3.3(e)(ii) hereof. Notwithstanding the foregoing
terms of this Section 3.4(b), any delivery or non-delivery of AMPS which
represents any departure from the results of an Auction, as determined by the
Auction Agent, shall be of no effect unless and until the Auction Agent shall
have been notified of such delivery or non-delivery in accordance with the terms
of Section 3.3(e) hereof. The Auction Agent shall have no duty or liability with
respect to enforcement of this Section 3.4(b).
3.5 Service Charge to be Paid to BD.
No later than 12:00 noon on the Business Day next succeeding each
Auction Date, the Auction Agent shall pay a service charge to BD from moneys
received from the Fund to each Broker-Dealer on the basis of the purchase price
of AMPS placed by such Broker-Dealer at such Auction. For the avoidance of
doubt, only one Broker-Dealer shall be considered to have placed a particular
share of AMPS at any particular Auction. The service charge shall be: (a) in the
case of any Auction Date immediately preceding a Dividend Period of less than
one year, the product of (i) a fraction the numerator of which is the number of
days in such Dividend Period and the denominator of which is 360, times (ii) 1/4
of 1%, times (iii) $25,000, times (iv) the sum of (A) the aggregate number of
AMPS placed by BD in the applicable Auction that were (x) the subject of a
Submitted Bid of a Beneficial Owner submitted by BD and continued to be held as
a result of such submission and (y) the subject of a Submitted Bid of a
Potential Beneficial Owner submitted by BD and were purchased as a result of
such submission plus (B) the aggregate number of AMPS subject to valid Hold
Orders (determined in accordance with Section 2 of Part II of the Statement of
Preferences) submitted to the Auction Agent by BD plus (C) the number of AMPS
deemed to be subject to Hold Orders by Beneficial Owners pursuant to Section 2
of Part II of the Statement of Preferences that were acquired by BD for its own
account or were acquired by such Beneficial Owners through BD; and (b) in the
case of any Auction Date immediately preceding a Special Dividend Period of one
year or longer, that amount as mutually agreed upon by the Fund and BD, based on
the selling concession that would be applicable to an underwriting of fixed or
variable rate preferred shares with a similar final maturity or variable rate
dividend period, at the commencement of such Special Dividend Period.
For purposes of subclause (a)(iv)(C) of the foregoing sentence, if any
Beneficial Owner who acquired AMPS through BD transfers those shares to another
Person other than pursuant to an Auction, then the Broker-Dealer for the shares
so transferred shall continue to be BD, provided, however, that if the transfer
was effected by, or if the transferee is, a Broker-Dealer other than BD, then
such Broker-Dealer shall be the Broker-Dealer for such shares.
IV. MISCELLANEOUS.
4.1 Termination.
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Any party may terminate this Agreement at any time upon five days'
prior written notice to the other party; provided, however, that if the
Broker-Dealer is Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated neither
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated nor the Auction Agent may
terminate this Agreement without first obtaining the prior written consent of
the Fund to such termination, which consent shall not be withheld unreasonably.
This Agreement shall automatically terminate upon the redemption of all
outstanding AMPS or upon termination of the Auction Agent Agreement.
4.2 Force Majeure.
Neither party to this Agreement shall be responsible or liable for any
failure or delay in the performance of its obligations under this Agreement
arising out of or caused, directly or indirectly, by circumstances beyond its
reasonable control, including, without limitation, acts of God; earthquakes;
fires; floods; wars; civil or military disturbances; sabotage; epidemics; riots;
interruptions, loss or malfunctions of utilities; computer (hardware or
software) or communications services; accidents; labor disputes; acts of civil
or military authority or governmental actions; it being understood that the
parties shall use reasonable efforts which are consistent with accepted
practices in the banking industry to resume performance as soon as practicable
under the circumstances.
4.3 Participant in Securities Depository; Payment of Dividends in
Same-Day Funds.
(a) BD is, and shall remain for the term of this Agreement, a member
of, or a participant in, the Securities Depository (or an affiliate of such
a member or participant).
(b) BD represents that it (or if BD does not act as Agent Member, one
of its affiliates) shall make all dividend payments on the AMPS available
in same-day funds on each Dividend Payment Date to customers that use BD
(or its affiliate) as Agent Member.
4.4 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 the 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 at its address or telecopier number set forth below:
If to the Auction Agent,
addressed to: Deutsche Bank Trust Company Americas
Corporate Trust & Agency Services
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Auction Rate Securities
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
If to the BD,
addressed to: Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxxx
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
or such other address or telecopier number as such party hereafter may
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 BD by a BD Officer and on behalf of the Auction Agent by an
Authorized Officer. BD may record telephone communications with the
Auction Agent.
4.5 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 implied,
between the parties relating to the subject matter hereof.
4.6 Benefits.
Nothing in this Agreement, express or implied, shall give to any
person, other than the Fund, the Auction Agent and BD and their respective
successors and permitted assigns, any benefit of any legal or equitable right,
remedy or claim under this Agreement.
4.7 Amendment; Waiver.
(a) This Agreement shall not be deemed or construed to be
modified, amended, rescinded, canceled or waived, in whole or in part,
except by a written instrument signed by a duly authorized
representative of the party to be charged.
(b) Failure of either party to this Agreement to exercise any
right or remedy hereunder in the event of a breach of this Agreement by
the other party shall not constitute a waiver of any such right or
remedy with respect to any subsequent breach.
4.8 Successors 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 BD
and the Auction Agent. This Agreement may not be assigned by either party hereto
absent the prior written consent of the other party.
4.9 Severability.
If any clause, provision or section of this Agreement 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
remaining clause, provision or section hereof.
4.10 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.
4.11 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.
4.12 Jurisdiction.
The parties agree that all actions and proceedings arising out of this
Auction Agency Agreement or any of the transactions contemplated hereby shall be
brought in the County of New York, and, in connection with any such action or
proceeding, submit to the jurisdiction of, and venue in, such County. Each of
the parties hereto also irrevocably waives all right to trial by jury in any
action, proceeding or counterclaim arising out of this Agreement or the
transactions contemplated hereby.
[Signature pages follow]
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.
DEUTSCHE BANK TRUST COMPANY AMERICAS, As Auction Agent
By:
-------------------------------------------------------
Name:
Title:
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
By:
-------------------------------------------------------
Name:
Title:
EXHIBIT A
DEUTSCHE BANK TRUST COMPANY AMERICAS
AUCTION BID FORM
Submit To: Issue:
--------- -----
Deutsche Bank Trust Company Americas EVERGREEN INCOME ADVANTAGE FUND
Corporate Trust & Agency Services Auction Market Preferred Shares, Series M28, Series W28,
000 Xxxx Xxxxxx, 0xx Xxxxx Series T7, Series W7, Series TH7, and Series F7 ("AMPS")
Xxx Xxxx, XX 00000
Attention: Auction Rate Securities
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
The undersigned Broker-Dealer submits the following Order on behalf of the
Bidder listed below:
Name of Bidder:
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BENEFICIAL OWNER
Shares of Series now held HOLD
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BID at rate of______________________________
SELL
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POTENTIAL BENEFICIAL OWNER
# of shares of Series___________
BID at rate of___________ Notes:
(1) If submitting more than one Bid for one Bidder, use additional
Auction Bid Forms.
(2) If one or more Bids covering in the aggregate more than the
number of outstanding shares held by any Beneficial Owner are
submitted, such bid shall be considered valid in the order of
priority set forth in the Auction Procedures on the above
issue.
(3) A Hold or Sell Order may be placed only by a Beneficial Owner
covering a number of shares not greater than the number of
shares currently held.
(4) Potential Beneficial Owners may make only Bids, each of which
must specify a rate. If more than one Bid is submitted on
behalf of any Potential Beneficial Owner, each Bid submitted
shall be a separate Bid with the rate specified.
(5) Bids may contain no more than three figures to the right of
the decimal point (.001 of 1%).
Fractions will not be accepted.
(6) An Order must be submitted in whole shares of AMPS with an
aggregate liquidation preference of $25,000.
XXXXXXX XXXXX, XXXXXX XXXXXX & XXXXX INCORPORATED
Authorized Signature
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EXHIBIT B
(Note: To be used only for transfers made other than pursuant to an Auction)
TRANSFER FORM
Re: EVERGREEN INCOME ADVANTAGE FUND
Auction Market Preferred Shares ("AMPS")
We are (check one):
[ ] the Existing Holder named below;
[ ] the Broker-Dealer for such Existing Holder; or
[ ] the Agent Member for such Existing Holder.
We hereby notify you that such Beneficial Owner has transferred
_________ Series ___ AMPS to _____________________________
_____________________________
(Name of Existing Holder)
_____________________________
(Name of Broker-Dealer)
_____________________________
(Name of Agent Member)
By:
---------------------------------------
Printed Name:
Title:
EXHIBIT C
(Note: To be used only for failures to deliver or to pay for
AMPS sold pursuant to an Auction)
NOTICE OF A FAILURE TO DELIVER
We are a Broker-Dealer for _____________________ (the "Purchaser"),
which purchased _______ Series ___ AMPS of EVERGREEN INCOME ADVANTAGE FUND in
the Auction held on ____________________ from the seller of such shares.
We hereby notify you that (check one):
______ the Seller failed to deliver such shares to the Purchaser.
______ the Purchaser failed to make payment to the Seller upon delivery of such
shares.
Name:
--------------------------------------
XXXXXXX XXXXX, XXXXXX XXXXXX & XXXXX
INCORPORATED
By:
--------------------------------------
Printed Name:
Title:
EXHIBIT D
SETTLEMENT PROCEDURES
The following summary of Settlement Procedures sets forth the
procedures expected to be followed in connection with the settlement of each
Auction and will be incorporated by reference in the Broker-Dealer Agreement.
1. On each Auction Date, the Auction Agent shall notify by
telephone, facsimile or other means of electronic communication
acceptable to the Broker-Dealers that participated in the Auction held
on such Auction Date and submitted an Order on behalf of any
Beneficial Owner or Potential Beneficial Owner of:
(a) the Applicable Rate fixed for the next succeeding Dividend
Period;
(b) whether Sufficient Clearing Bids existed for the
determination of the Applicable Rate;
(c) if such Broker-Dealer (a "Seller's Broker-Dealer") submitted
a Bid or Sell Order on behalf of a Beneficial Owner, the number of
AMPS, if any, to be sold by such Beneficial Owner;
(d) if such Broker-Dealer (a "Buyer's Broker-Dealer") submitted a
Bid on behalf of a Potential Beneficial Owner, the number of AMPS, if
any, to be purchased by such Potential Beneficial Owner;
(e) if the aggregate number of AMPS to be sold by all Beneficial
Owners on whose behalf such Broker-Dealer submitted a Bid or a Sell
Order exceeds the aggregate number of AMPS to be purchased by all
Potential Beneficial Owners on whose behalf such Broker-Dealer
submitted a Bid, the name or names of one or more Buyer's
Broker-Dealers (and the name of the Agent Member, if any, of each such
Buyer's Broker-Dealer) acting for one or more purchasers of such
excess number of AMPS and the number of such shares to be purchased
from one or more Beneficial Owners on whose behalf such Broker-Dealer
acted by one or more Potential Beneficial Owners on whose behalf each
of such Buyer's Broker-Dealers acted;
(f) if the aggregate number of AMPS to be purchased by all
Potential Beneficial Owners on whose behalf such Broker-Dealer
submitted a Bid exceeds the aggregate number of AMPS to be sold by all
Beneficial Owners on whose behalf such Broker-Dealer submitted a Bid
or a Sell Order, the name or names of one or more Seller's Broker
Dealers (and the name of the Agent Member, if any, of each such
Seller's Broker-Dealer) acting for one or more sellers of such excess
number of AMPS and the number of such shares to be sold to one or more
Potential Beneficial Owners on whose behalf such Broker-Dealer acted
by one or more Beneficial Owners on whose behalf each of such Seller's
Broker-Dealers acted; and
(g) the Auction Date of the next succeeding Auction with respect
to the AMPS.
2. On each Auction Date, each Broker-Dealer that submitted an
Order on behalf of any Beneficial Owner or Potential Beneficial Owner
shall:
(a) in the case of a Broker-Dealer that is a Buyer's
Broker-Dealer, instruct each Potential Beneficial Owner on whose behalf
such Broker-Dealer submitted a Bid that was accepted, in whole or in
part, to instruct such Potential Beneficial Owner's Agent Member to pay
to such Broker-Dealer (or its Agent Member) through the Securities
Depository the amount necessary to purchase the number of AMPS to be
purchased pursuant to such Bid against receipt of such shares and
advise such Potential Beneficial Owner of the Applicable Rate for the
next succeeding Dividend Period;
(b) in the case of a Broker-Dealer that is a Seller's
Broker-Dealer, instruct each Beneficial Owner on whose behalf such
Broker-Dealer submitted a Sell Order that was accepted, in whole or in
part, or a Bid that was accepted, in whole or in part, to instruct such
Beneficial Owner's Agent Member to deliver to such Broker-Dealer (or
its Agent Member) through the Securities Depository the number of AMPS
to be sold pursuant to such Order against payment therefor and advise
any such Beneficial Owner that will continue to hold AMPS of the
Applicable Rate for the next succeeding Dividend Period;
(c) advise each Beneficial Owner on whose behalf such
Broker-Dealer submitted a Hold Order of the Applicable Rate for the
next succeeding Dividend Period;
(d) advise each Beneficial Owner on whose behalf such
Broker-Dealer submitted an Order of the Auction Date for the next
succeeding Auction; and
(e) advise each Potential Beneficial Owner on whose behalf such
Broker-Dealer submitted a Bid that was accepted, in whole or in part,
of the Auction Date for the next succeeding Auction.
3. On the basis of the information provided to it pursuant to 1.
above, each Broker-Dealer that submitted a Bid or a Sell Order on
behalf of a Potential Beneficial Owner or a Beneficial Owner shall, in
such manner and at such time or times as in its sole discretion it may
determine, allocate any funds received by it pursuant to 2(a) above
and any AMPS received by it pursuant to 2(b) above among the Potential
Beneficial Owners, if any, on whose behalf such Broker-Dealer
submitted Bids, the Beneficial Owners, if any, on whose behalf such
Broker-Dealer submitted Bids that were accepted or Sell Orders, and
any Broker-Dealer or Broker-Dealers identified to it by the Auction
Agent pursuant to 1(e) or 1(f) above.
4. On each Auction Date:
(a) each Potential Beneficial Owner and Beneficial Owner shall
instruct its Agent Member as provided in 2(a) or (b) above, as the case
may be;
(b) each Seller's Broker-Dealer which is not an Agent Member of
the Securities Depository shall instruct its Agent Member to (A) pay
through the Securities Depository to the Agent Member of the Beneficial
Owner delivering shares to such Broker-Dealer pursuant to 2(b) above
the amount necessary to purchase such shares against receipt of such
shares, and (B) deliver such shares through the Securities Depository
to any Buyer's Broker-Dealer (or its Agent Member) identified to such
Seller's Broker-Dealer pursuant to 1(e) above against payment therefor;
and
(c) each Buyer's Broker-Dealer which is not an Agent Member of
the Securities Depository shall instruct its Agent Member to (A) pay
through the Securities Depository to any Seller's Broker-Dealer (or
its Agent Member) identified pursuant to 1(f) above the amount
necessary to purchase the shares to be purchased pursuant to 2(a)
above against receipt of such shares, and (B) deliver such shares
through the Securities Depository to the Agent Member of the purchaser
thereof against payment therefor.
5. On the day after the Auction Date:
(a) each Bidder's Agent Member referred to in 4(a) above shall
instruct the Securities Depository to execute the transactions
described in 2(a) or (b) above, and the Securities Depository shall
execute such transactions;
(b) each Seller's Broker-Dealer or its Agent Member shall
instruct the Securities Depository to execute the transactions
described in 4(b) above, and the Securities Depository shall execute
such transactions; and
(c) each Buyer's Broker-Dealer or its Agent Member shall instruct
the Securities Depository to execute the transactions described in 4(c)
above, and the Securities Depository shall execute such transactions.
6. If a Beneficial Owner selling AMPS in an Auction fails to
deliver such shares (by authorized book-entry), a Broker-Dealer may
deliver to the Potential Beneficial Owner on behalf of which it
submitted a Bid that was accepted a number of whole AMPS that is less
than the number of shares that otherwise was to be purchased by such
Potential Beneficial Owner. In such event, the number of AMPS to be so
delivered shall be determined solely by such Broker-Dealer. Delivery
of such lesser number of shares shall constitute good delivery.
Notwithstanding the foregoing terms of this paragraph 6., any delivery
or non-delivery of shares which shall represent any departure from the
results of an Auction, as determined by the Auction Agent, shall be of
no effect unless and until the Auction Agent shall have been notified
of such delivery or non-delivery in accordance with the provisions of
the Auction Agent Agreement and the Broker-Dealer Agreements.
