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AUCTION AGENT AGREEMENT
between
THE BLACKROCK FLORIDA INSURED MUNICIPAL 2008 TERM TRUST
and
BANKERS TRUST COMPANY
Dated as of November 23, 1992
Relating to
Auction Rate Municipal Preferred Shares of Beneficial Interest, Series R7
(the "Preferred Shares")
of
THE BLACKROCK FLORIDA INSURED MUNICIPAL 2008 TERM TRUST
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THIS AUCTION AGENT AGREEMENT dated as of November 23, 1992,
between THE BLACKROCK FLORIDA INSURED MUNICIPAL 2008 TERM TRUST, a
Massachusetts business trust (the "Company"), and BANKERS TRUST COMPANY, a
New York banking corporation.
The Company proposes to duly authorize and issue 1,030 shares of
Auction Rate Municipal Preferred Shares of Beneficial Interest, Series R7,
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 (the "Preferred Shares"); pursuant to
the Company's Certificate of Designation (as defined below). An Auction (as
defined below) will be conducted for the Preferred Shares. The Company
desires that Bankers Trust Company perform certain duties as agent in
connection with the 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 Certificate of Designation
Capitalized terms not defined herein shall have the respective
meanings specified in the Certificate of Designation.
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) "Certificate of Designation" shall mean the Certificate of
Designation of the Company, establishing the powers, preferences and rights
of the Preferred Shares filed on November 18, 1992 in the Office of the
State Department of Assessments and Taxation of the Commonwealth of
Massachusetts.
(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 Certificate of Designation.
(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 Annex 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
Preferred Shares, listed as such in the share 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 Certificate of Designation provides that the Applicable
Rate on the Preferred Shares 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
Trustees 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 Preferred Shares 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 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
the Preferred Shares will be a number of days (other than 7) 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 the 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 the 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
Certificate of Designation it is advisable that the Company issue a Notice
of Special Dividend Period for the 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 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 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 (i) it
has not obtained the advice in writing of Xxxxx'x and S&P or any Substitute
Rating Agency that the proposed Special Dividend Period will not adversely
affect their then-current rating on the Preferred Shares, (ii) 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 the Valuation Date immediately preceding
the Business Day prior to the 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), (iii) 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
(iv) 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 (i), (ii), (iii) or (iv) 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, provided that if the then-current Dividend Period is
a Special Dividend Period of less than 7 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 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.
(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, in the case of a Dividend Period of 28 days or fewer, and
may, in the case of a Dividend Period of 35 days or more, 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
share 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 Maximum Applicable Rate from the higher of the 30-day "AA" Composite
Commercial Paper Rate and the Taxable Equivalent of the Short-Term
Municipal Bond Rate (except in the case of a Special Dividend Period in
which case the Maximum Applicable Rate shall be determined from the higher
of the Special Dividend Period Reference Rate and the Taxable Equivalent of
the Short-Term Municipal Bond Rate). If any such rate on which the Maximum
Applicable Rate is to be based 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 Certificate
of Designation; 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 the Preferred Shares, the Auction Agent shall notify the Company
and the Broker- Dealers of the applicable rate so determined and the
Maximum Applicable Rate.
(ii) If the rate on which the Maximum Applicable Rate is
to be based is the 30-day "AA" Composite Commercial Paper Rate and such
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 30-day "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 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 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
Preferred Shares 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 the
Preferred Shares 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 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 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 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
Agreement, 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 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 the 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 Maximum Applicable Rate as determined from the higher
of the 30-day "AA" Composite Commercial Paper Rate and the Taxable
Equivalent of the Short-Term Municipal Bond Rate (except in the case of a
Special Dividend Period in which case the Maximum Applicable Rate shall be
the higher of the Special Dividend Period Reference Rate and the Taxable
Equivalent of the Short-Term Municipal Bond 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 Certificate of Designation Submission deadline is 1:00 P.M.
Not earlier than Auction Agent makes determination pursuant to
1:00 P.M. Paragraph 11(d)(i) of the Certificate of Designation.
By approximately Auction Agent advises Company of results of 3:00
P.M. Auction as provided in Paragraph 11(d)(ii) of the Certificate of
Designation.
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 Certificate of Designation.
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 the
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
28 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 365, times (B) 1/4 of 1%, times (C) $50,000,
times (D) the sum of the aggregate number of outstanding 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 28 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 Series R7 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 Certificate of Designation 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
Certificate of Designation. 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 Dividend Payment Date, dividends on
the Preferred Shares, (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 Certificate of Designation. 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 Certificate of
Designation. 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 Certificate of
Designation. 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 Share Certificates.
On the Date of Original Issue, one certificate for all the 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 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 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, upon surrender of the old certificate 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 certificate for the Preferred Shares
is 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 the 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 a replacement
certificate should it be represented that the original certificate has 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 a new certificate in exchange for
and upon the cancellation of a mutilated certificate. 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 Certificate; Record Retention.
The Paying Agent shall retain share 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 Share Register.
The Paying Agent shall maintain the share 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
share 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 share
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 share 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 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 business trust in good standing under the laws of the Commonwealth
of Massachusetts and has full power to execute and deliver this Agreement
and to authorize, create and issue the 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 form of the certificates evidencing the Preferred
Shares comply with all applicable laws of the Commonwealth of Massachusetts
(v) the Preferred Shares have been duly and validly
authorized by the Company and, upon completion of the initial sale of the
shares of Preferred Shares and receipt of payment therefor, will be validly
issued, fully paid and nonassessable;
(vi) the offering of the 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 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 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 business
trust in good standing under the laws of the Commonwealth of Massachusetts
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, The BlackRock Insured Municipal addressed:
2008 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 Certificate of Designation 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 Commonwealth of Massachusetts applicable to agreements
made and to be performed in said state.
7.10 Shareholder Liability.
No shareholder of the Trust shall be subject to any personal
liability whatsoever to any person in connection with trust property or the
acts, obligations or affairs of the Trust. No Trustee, officer, employee or
agent of the Trust shall be subject to any personal liability whatsoever to
any person, other than the Trust or its shareholders, in connection with
Trust property or the affairs of the Trust, save only that arising from bad
faith, willful misfeasance, gross negligence or reckless disregard for his
duty to such person; and all such persons shall look solely to the Trust
property for satisfaction of claims of any nature arising in connection
with the affairs of the Trust. If any shareholder, Trustee, officer,
employee, or agent, as such, of the Trust, is made a party to any suit or
proceeding to enforce any such liability, he shall not, on account thereof,
be held to any personal liability. The Trust shall indemnify and hold each
shareholder harmless from and against all claims and liabilities to which
such shareholder may become subject by reason of his being or having been a
shareholder, and shall reimburse such Shareholder for all legal and other
expenses reasonably incurred by him in connection with any such claim or
liability.
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 BLACKROCK FLORIDA INSURED
MUNICIPAL 2008 TERM TRUST INC.
By: /s/ Xxxxx X. Xxxxxxxxxxx
------------------------
Xxxxx X. Xxxxxxxxxxx,
President
BANKERS TRUST COMPANY
By: /s/ Xxxxx Xxxxxx
--------------------------
Xxxxx Xxxxxx,
Assistant Treasurer
