EXHIBIT (k)(4)
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AUCTION AGENT AGREEMENT
between
MUNIYIELD PENNSYLVANIA INSURED FUND
and
THE BANK OF NEW YORK
Dated as of , 2004
Relating to
AUCTION MARKET PREFERRED SHARES
("AMPS"),
Series C
of
MUNIYIELD PENNSYLVANIA INSURED FUND
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THIS AUCTION AGENT AGREEMENT, dated as of , 2004, is
between MUNIYIELD PENNSYLVANIA INSURED FUND, a Massachusetts business trust
(the "Trust"), and THE BANK OF NEW YORK, a New York banking corporation.
The Trust proposes to duly authorize and issue 560 shares of Auction
Market Preferred Shares, Series C ("Series C AMPS") with a par value of $.05
per share and a liquidation preference of $25,000 per share plus an amount
equal to accumulated but unpaid dividends (whether or not earned or declared),
pursuant to the Trust's Certificate of Designation (as defined below). The
Series C AMPS are sometimes referred to as the "AMPS." A separate Auction (as
defined below) will be conducted for the AMPS and any other series of AMPS of
the Trust. The Trust desires that The Bank of New York perform certain duties
as agent in connection with each Auction of AMPS (in such capacity, the
"Auction Agent"), and as the transfer agent, registrar, dividend disbursing
agent and redemption agent with respect to the AMPS (in such capacity, the
"Paying Agent"), upon the terms and conditions of this Agreement, and the
Trust hereby appoints The Bank of New York 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 Trust and the Auction Agent agree as follows:
I. 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, other xxxx Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated, made known to the Auction
Agent to be controlled by, in control of, or under common control
with, the Trust or its successors.
(b) "Agent Member" of any Person shall mean such Person's agent
member of the Securities Depository that will act on behalf of a
Bidder.
(c) "Auction" shall have the meaning specified in Section 2.1
hereof.
(d) "Auction Agent Acceptance Fee" means an acceptance fee as
set forth in a written agreement between the Auction Agent and the
Trust.
(e) "Auction Agent Fee" means the fees, other than the Auction
Agent Acceptance Fee, set forth in a written agreement signed by
the Auction Agent and the Trust.
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(f) "Auction Procedures" shall mean the Auction Procedures that
are set forth in Paragraph [10] of the Certificate of Designation.
(g) "Authorized Officer" shall mean each Vice President,
Assistant Vice President, and Assistant Treasurer of the Auction
Agent assigned to the Dealing and Trading Group of its Corporate
Trust Department, and every other officer or employee of the
Auction Agent designated as an "Authorized Officer" for purposes
hereof in a written communication to the Trust.
(h) "Broker-Dealer Agreement" shall mean each agreement between
the Auction Agent and a Broker-Dealer substantially in the form
attached hereto as Exhibit A.
(i) "Certificate of Designation" shall mean the Certificate of
Designation of the Trust, establishing the powers, preferences and
rights of the AMPS, filed on August 24, 1992 in the Office of the
Secretary of State of The Commonwealth of Massachusetts.
(j) "Trust Officer" shall mean the Chairman and Chief Executive
Officer, 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 Trust and
every other officer or employee of the Trust designated as a
"Trust Officer" for purposes hereof in a written notice from the
Trust to the Auction Agent.
(k) "Holder" shall be a holder of record of one or more AMPS,
listed as such in the share register maintained by the Paying
Agent pursuant to Section 4.6 hereof.
(l) "Settlement Procedures" shall mean the Settlement Procedures
attached as Exhibit A to the Broker-Dealer Agreement.
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.
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(d) All references herein to a particular time of day shall be
to Eastern Standard Time.
II. 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 Series C AMPS 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 Trust advises results from implementation of the
Auction Procedures. The Board of Trustees of the Trust has adopted
a resolution appointing The Bank of New York 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 AMPS 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 in 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 set forth
fully herein. In the case of any conflict between the terms of any
document incorporated herein by reference and the terms hereof,
the Auction Agent is, subject to its obligations as set forth in
Section 6.1, authorized to perform its duties according to the
terms hereof, and shall have no liability for so doing.
2.2. Preparation for Each Auction; Maintenance
of Registry of Existing Holders.
(a) As of the date hereof, the Trust shall provide the Auction
Agent with a list of the Broker-Dealers 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. The
Auction Agent shall keep a list of Broker-Dealers with whom it has
signed such Broker-Dealer Agreements, and shall endeavor to keep
such list 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 AMPS. Not later than five Business Days prior to any
Auction Date for which any change in such list of Broker-Dealers
is to be effective, the Trust shall notify the Auction Agent in
writing of such change and, if any such change is the addition of
a Broker-Dealer to such list, the Trust shall cause to be
delivered to the Auction Agent for execution by the Auction Agent
a Broker-Dealer Agreement signed by such Broker-Dealer. The
Auction Agent shall have
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entered into a Broker-Dealer Agreement with each Broker-Dealer
prior to the participation of any such Broker-Dealer in any
Auction.
(b) In the event that 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.
(c) The provisions contained in paragraph 2 of the Certificate
of Designation concerning Special Dividend Periods and the
notification of a Special Dividend Period will be followed by the
Trust and, to the extent applicable, the Auction Agent, 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.
(d) (i) On each Auction Date, the Auction Agent shall determine
the Reference Rate and the Maximum Applicable Rate. 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 Trust as to the
method of such conversion. Not later than 9:30 A.M. on each
Auction Date, the Auction Agent shall notify the Trust and the
Broker-Dealers of the Reference Rate so determined and of the
Maximum Applicable Rate.
(ii) If the Reference Rate is the applicable LIBOR Rate and
such rate is to be based on rates supplied by LIBOR Dealers and
one or more of the LIBOR Dealers shall not provide a quotation for
the determination of the applicable LIBOR Rate, the Auction Agent
promptly shall notify the Trust so that the Trust can determine
whether to select a Substitute LIBOR Dealer or Substitute LIBOR
Dealers to provide the quotation or quotations not being supplied
by any LIBOR Dealer or LIBOR Dealers. The Trust promptly shall
advise the Auction Agent of any such selection. If the Trust does
not select any such Substitute LIBOR Dealer or Substitute LIBOR
Dealers, then the rates shall be supplied by the remaining LIBOR
Dealer or LIBOR Dealers.
(iii) If, after the date of this Agreement, there is any
change in the prevailing rating of AMPS by either of the rating
agencies (or Substitute Rating Agency or successor rating agency)
referred to in the definition of the Maximum Applicable Rate,
subject to the provisions of paragraph [12] of the Certificate of
Designation, thereby resulting in any change in the corresponding
applicable percentage or corresponding applicable spread for the
AMPS, as set forth in said definition (the "Percentage or
Spread"), the Trust shall notify the Auction Agent in writing of
such change in the Percentage or Spread prior to 9:00 A.M. on the
Auction Date for AMPS next succeeding such change. The Percentage
for the AMPS on the date of this Agreement is as specified in
paragraph [10(a)(vii)] of the Articles Supplementary. The Auction
Agent shall be entitled to conclusively
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rely on the last Percentage or Spread of which it has received
notice from the Trust (or, in the absence of such notice, the
Percentage or Spread set forth in the preceding sentence) in
determining the Maximum Applicable Rate as set forth in Section
2.2(d)(i) hereof.
(e) The Auction Agent shall maintain by series a current
registry of the Existing Holders of the AMPS for purposes of each
Auction. The Trust shall use its best efforts to provide or cause
to be provided to the Auction Agent within ten Business Days
following the date of the Closing a list of the initial Existing
Holders of AMPS, and the Broker-Dealer of each such Existing
Holder through which such Existing Holder purchased such shares.
The Auction Agent may conclusively 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 AMPS to
another Person.
(f) In the event of any partial redemption of any AMPS, upon
notice by the Trust to the Auction Agent of such partial
redemption, the Auction Agent promptly shall request the
Securities Depository to notify the Auction Agent of the
identities of the Agent Members (and the respective numbers of
shares) from the accounts of which 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 Auction preceding the date of redemption with respect
to such AMPS 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 shares are to be redeemed) the number of AMPS of each such
Existing Holder, if any, to be redeemed by the Trust, 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. 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 having
ownership of the number of AMPS shown in the Auction Agent's
registry of Existing Holders.
(i) The Auction Agent shall register a transfer of the
ownership of AMPS from an Existing Holder to another Existing
Holder, or to another Person if permitted by the Trust, only if
(A) such transfer is made pursuant to an Auction or (B) if such
transfer is made other than pursuant to an Auction, the Auction
Agent has been notified of such transfer in writing in a notice
substantially in the form of Exhibit C to the Broker-Dealer
Agreements, by such Existing Holder or by the Agent Member of such
Existing Holder. 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 Existing Holders of
any AMPS if the Auction Agent has been notified in writing, in a
notice substantially in the form of Exhibit D to the Broker-Dealer
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Agreement, by the Agent Member or the Broker-Dealer of any Person
that (i) purchased any AMPS and the seller failed to deliver such
shares or (ii) sold any AMPS and the purchaser failed to make
payment to such Person upon delivery to the purchaser of such
shares.
(g) The Auction Agent may, but shall not be obligated, to
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 Beneficial Owners of any AMPS. 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 Trust; provided, however, that the Auction
Agent reserves the right and is authorized to disclose any such
information if (i) 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, (ii) it is advised by its counsel that its failure to
do so would be unlawful or (iii) failure to do so would expose the
Auction Agent to loss, liability, claim, damage or expense for
which it has not received indemnity or security satisfactory to
it.
2.3. Auction Schedule.
The Auction Agent shall conduct Auctions in accordance with the schedule
set forth below. Such schedule may be changed by the Auction Agent with the
consent of the Trust, which consent shall not be withheld unreasonably. 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. The Auction Agent will follow The Bond Market
Association's Market Practice U.S. Holiday Recommendations for shortened
trading days for bond markets (the "BMA Recommendation") unless the Auction
Agent is instructed otherwise by the Trust. In the event of a BMA
Recommendation on an Auction Date, the Submission Deadline will be 11:30 A.M.
instead of 1:00 P.M. and as a result the notice of Auction results will occur
at an earlier time.
Time Event
---- -----
By 9:30 A.M. Auction Agent advises the Trust and the
Broker-Dealers of the Reference Rate and the
Maximum Applicable Rate as set forth in Section
2.2(d)(i) hereof.
9:30 A.M. - 1:00 P.M. Auction Agent assembles information
communicated to it by Broker-Dealers as
provided in Paragraph 10(c)(i) of the Articles
Supplementary. Submission deadline is 1:00 P.M.
Not earlier than 1:00 Auction Agent makes determinations pursuant to
P.M. Paragraph 10(d)(i) of the Articles
Supplementary.
By approximately Auction Agent advises the Trust of the results
3:00 P.M. of the Auction as provided in Paragraph
10(d)(ii) of the Articles
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Supplementary.
Submitted Bids and Submitted Sell Orders are
accepted and rejected in whole or in part and
shares of AMPS allocated as provided in
Paragraph 10(e) of the Articles Supplementary.
Auction Agent gives notice of the 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 other mutually
acceptable electronic means as set forth in Paragraph (a) of the Settlement
Procedures. Unless instructed otherwise in writing by the Trust, the Auction
Agent is authorized to release the Applicable Rate determined as a result of
the Auction for public dissemination.
2.5. Broker-Dealers.
(a) Not later than 12:00 noon on each Auction Date, the Trust
shall pay to the Auction Agent in Federal Funds or similar
same-day funds an amount in cash equal to (i) in the case of any
Auction Date immediately preceding a 7-Day Dividend Period, 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)
$25,000 times (D) the sum of the aggregate number of Outstanding
AMPS for which the Auction is conducted and (ii) in the case of
any Special Dividend Period, the amount determined by mutual
consent of the Trust and the Broker-Dealers pursuant to Section
3.5 of the Broker-Dealer Agreements. The Auction Agent shall apply
such moneys as set forth in Section 3.5 of the Broker-Dealer
Agreements and shall thereafter remit to the Trust any remaining
funds paid to the Auction Agent pursuant to this Section 2.5(a).
(b) The Trust may designate an Affiliate or Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated to act as a Broker-Dealer.
(c) The Auction Agent shall terminate any Broker-Dealer
Agreement as set forth therein if so directed by the Trust.
(d) Subject to Section 2.5(b) hereof, the Auction Agent from
time to time shall enter into such Broker-Dealer Agreements as the
Trust shall request.
(e) Subject to Section 2.2(a), the Auction Agent shall maintain
a list of Broker-Dealers.
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2.6. Ownership of AMPS and Submission of Bids
by the Trust and its Affiliates.
Neither the Trust nor any Affiliate of the Trust may submit any Sell
Order or Bid, directly or indirectly, in any Auction, except that an Affiliate
of the Trust that is a Broker-Dealer may submit a Sell Order or Bid on behalf
of a Beneficial Owner or a Potential Beneficial Owner. The Trust shall notify
the Auction Agent if the Trust or, to the best of the Trust's knowledge, any
Affiliate of the Trust becomes a Beneficial Owner of any AMPS. Any AMPS
redeemed, purchased or otherwise acquired (i) by the Trust shall not be
reissued, except in accordance with the requirements of the Securities Act of
1933, as amended, or (ii) by its Affiliates shall not be transferred (other
than to the Trust). 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 Trust, its agents, independent
public accountants and counsel, access at reasonable times during normal
business hours to review and make extracts or copies (at the Trust'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 Trust
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 Trust to maintain such records for such
longer period not in excess of four years, then for such longer period which
shall not be in excess of four years), and such records, in reasonable detail,
shall accurately and fairly reflect the actions taken by the Auction Agent
hereunder. The Trust agrees to keep confidential any information regarding the
customers of any Broker-Dealer received from the Auction Agent in connection
with this Agreement or any Auction, 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, provided that the Trust reserves the right to disclose any
such information if it is advised by its counsel that its failure to do so
would (i) be unlawful or (ii) expose it to liability, unless the Broker-Dealer
shall have offered indemnification satisfactory to the Trust. 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, provided that such agent, accountant or counsel may
reserve the right to disclose any such information if it is advised by its
counsel that its failure to do so would (i) be unlawful or (ii) expose it to
liability, unless the Broker-Dealer shall have offered indemnification
satisfactory to such agent, accountant or counsel. The Auction Agent shall
have no liability in connection with allowing access to the Trust's books,
records, documents and other information pursuant to the terms of this Section
2.7 to the Trust, its agents, independent public accountants and counsel.
III. THE AUCTION AGENT AS PAYING AGENT.
3.1. The Paying Agent.
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The Board of Trustees of the Trust has adopted a resolution appointing
The Bank of New York as transfer agent, registrar, dividend disbursing agent
and redemption agent for the Trust in connection with the AMPS (in such
capacity, 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
with respect to the AMPS and as set forth in this Section 3.
3.2. The Trust's Notices to the Paying Agent.
Whenever any AMPS are to be redeemed, the Trust promptly shall deliver
to the Paying Agent a Notice of Redemption upon the terms set forth in
[Section 4(c)] of the Certificate of Designation, which will be mailed by the
Trust to each Holder at least five Business Days prior to the date such Notice
of Redemption is required to be mailed pursuant to the Certificate of
Designation. The Paying Agent shall have no responsibility to confirm or
verify the accuracy of any such Notice.
3.3. The Trust to Provide Funds for Dividends and Redemptions.
(a) Not later than noon on each Dividend Payment Date, the Trust
shall deposit with the Paying Agent an aggregate amount of Federal
Funds or similar same-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 Trust shall give a Notice of Redemption, then by noon
of the date fixed for redemption, the Trust shall deposit in trust
with the Paying Agent an aggregate amount of Federal Funds or
similar same-day funds sufficient to redeem such shares of AMPS
called for redemption and shall give the Paying Agent irrevocable
instructions and authority to pay the redemption price to the
Holders of shares of AMPS called for redemption upon surrender of
the certificate or certificates therefor.
3.4. Disbursing Dividends and Redemption Price.
After receipt of the Federal Funds or similar same-day funds and
instructions from the Trust described in Sections 3.3(a) and (b) above, the
Paying Agent shall pay to the Holders (or former Holders) entitled thereto (i)
on each corresponding Dividend Payment Date, dividends on the AMPS and (ii) on
any date fixed for redemption, the redemption price of any AMPS called for
redemption. The amount of dividends for any Dividend Period to be paid by the
Paying Agent to Holders will be determined by the Trust 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 AMPS called for redemption will be
determined as set forth in Paragraph 4 of the Certificate of Designation. The
Trust shall notify the Paying Agent in writing of a decision to redeem any
AMPS on or prior to the date specified in Section 3.2 above, and such notice
by the Trust to the Paying Agent shall contain the information required to be
stated in a Notice of Redemption required to be mailed by the Trust to such
Holders. The Paying Agent shall have no duty to
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determine the redemption price and may rely conclusively on the amount thereof
set forth in a Notice of Redemption.
IV. THE PAYING AGENT AS TRANSFER AGENT AND REGISTRAR.
4.1. Original Issue of Share Certificates.
On the Date of Original Issue for any AMPS, one certificate for the AMPS
shall be issued by the Trust and registered in the name of Cede & Co., as
nominee of the Securities Depository, and countersigned by the Paying Agent.
The Trust will give the Auction Agent prior written notice and instruction as
to the issuance and redemption of AMPS.
4.2. Registration of Transfer or Exchange of Shares.
Except as provided in this Section 4.2, the AMPS 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 Trust shall not have selected a substitute Securities Depository
acceptable to the Paying Agent prior to such resignation, then upon such
resignation, the AMPS, at the Trust's request, may 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 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 in connection with any
registration of transfer or exchange or funds necessary for the payment of
such taxes.
4.3. Removal of Legend.
Any request for removal of a legend indicating a restriction on transfer
from a certificate evidencing AMPS shall be accompanied by an opinion of
counsel stating that such legend may be removed and such shares may be
transferred free of the restriction described in such legend, said opinion to
be delivered under cover of a letter from a Trust Officer authorizing the
Paying Agent to remove the legend on the basis of said opinion.
4.4. Lost, Stolen or Destroyed Share 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 Trust
and by the Paying Agent, subject at all times to provisions of law, the
By-Laws of the Trust governing such matters and resolutions adopted by the
Trust with respect to lost, stolen or destroyed securities. The Paying Agent
may issue new certificates in exchange for and upon the cancellation of
mutilated certificates. Any request by the Trust 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 Trust to the Paying Agent that such
issuance will comply with provisions of applicable law and the By-Laws and
resolutions of the Trust.
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4.5. Disposition of Canceled Certificates; Record Retention.
The Paying Agent shall retain share certificates which have been
canceled 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, upon written request by the Trust, shall afford to the
Trust, its agents and counsel access at reasonable times during normal
business hours to review and make extracts or copies (at the Trust's sole cost
and expense) of such certificates and accompanying documentation. Upon request
by the Trust at any time during this two-year period, the Paying Agent shall
deliver to the Trust the canceled certificates and accompanying documentation.
The Trust, at its expense, shall retain such records for a minimum additional
period of four calendar years from the date of delivery of the records to the
Trust 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 Trust also
shall undertake to furnish to the Securities and Exchange Commission, upon
demand, either at their principal office or at any regional office, complete,
correct and current hard copies of any and all such records.
4.6. Share Register.
The Paying Agent shall maintain the share register, which shall contain
a list of the Holders, the number of 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
written request or demand for the inspection of the share register or any
other books of the Trust in the possession of the Paying Agent, the Paying
Agent will notify the Trust and secure instructions as to permitting or
refusing such inspection; provided, however, that the Auction Agent reserves
the right and is authorized to permit such inspection if (i) 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, (ii) it is advised by its counsel that its failure to do so would
be unlawful or (iii) 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.
4.7. Return of Funds.
Any funds deposited with the Paying Agent by the Trust for any reason
under this Agreement, including for the payment of dividends or the redemption
of any AMPS, that remain with the Paying Agent after 12 months shall be repaid
to the Trust upon written request by the Trust.
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V. REPRESENTATIONS AND WARRANTIES.
5.1. Representations and Warranties of the Trust.
The Trust represents and warrants to the Auction Agent that:
(i) the Trust is a duly organized and validly existing 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 AMPS;
(ii) the Trust is registered with the Securities and
Exchange Commission under the Investment Company Act of 1940, as
amended, as a closed-end, non-diversified, management investment
company;
(iii) this Agreement has been duly and validly authorized,
executed and delivered by the Trust and constitutes the legal,
valid and binding obligation of the Trust, enforceable against the
Trust 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 AMPS
comply with all applicable laws of The Commonwealth of
Massachusetts;
(v) the AMPS have been duly and validly authorized by the
Trust and, upon completion of the initial sale of the AMPS and
receipt of payment therefor, will be validly issued, fully paid
and nonassessable;
(vi) at the time of the offering of the AMPS, the shares
offered will be registered under the Securities Act of 1933, as
amended, and no further action by or before any governmental body
or authority of the United States or of any state thereof is
required in connection with the execution and delivery of this
Agreement or will be required in connection with the issuance of
the AMPS, except such action as required by applicable state
securities or insurance laws, all of which action will have been
taken;
(vii) the execution and delivery of this Agreement and the
issuance and delivery of the AMPS do not and will not conflict
with, violate, or result in a breach of, the terms, conditions or
provisions of, or constitute a default under, the Declaration of
Trust, Certificate of Designation or the By-Laws of the Trust, any
law or regulation applicable to the Trust, any order or decree of
any court or public authority having jurisdiction over the Trust,
or any mortgage, indenture, contract, agreement or undertaking to
which the Trust 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 will be payable upon or in respect
of the issuance of the AMPS.
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5.2. Representations and Warranties of the Auction Agent.
The Auction Agent represents and warrants to the Trust 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.
VI. THE AUCTION AGENT.
6.1. Duties and Responsibilities.
(a) The Auction Agent is acting solely as agent for the Trust
hereunder and owes no fiduciary duties to any Person except as
specifically provided by this Agreement. The Auction Agent owes no
duties to any person other than the Trust by reason of this
Agreement.
(b) The Auction Agent undertakes to perform such duties and only
such duties as are set forth specifically in this Agreement, and
no implied covenants or obligations shall be read into this
Agreement against the Auction Agent.
(c) In the absence of willful misconduct or negligence on its
part, the Auction Agent shall not be liable for any action taken,
suffered or omitted by it 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 the
absence of willful misconduct unless the Auction Agent shall have
been negligent in ascertaining (or failing to ascertain) the
pertinent facts.
(d) The Auction Agent shall not be responsible or liable for any
failure or delay in the performance of its obligations under this
Agreement arising out of or caused, directly or indirectly, by
circumstances beyond its reasonable control, including, without
limitation, acts of God; earthquakes; fires, floods; wars; civil
or military disturbances; sabotage; acts of war or terrorism;
epidemics; riots; interruptions, loss or malfunctions of
utilities; computer (hardware or software) or communications
services; accidents; labor disputes (including, without
limitation, strikes or work stoppages); acts of civil or military
authority or governmental actions; it being understood that the
Auction Agent shall use reasonable efforts which are consistent
with accepted practices in the banking industry to resume
performance as soon as practicable under the circumstances. In no
event shall the Auction Agent be responsible or liable for
special, indirect or consequential loss or damage of any kind
whatsoever (including, but not limited to, loss of profit), even
if the Auction Agent has been advised of the likelihood of such
loss or damage and regardless of the form of action.
6.2. Rights of the Auction Agent.
(a) The Auction Agent may conclusively rely upon, and shall be
protected in acting or refraining from acting upon, any
communication authorized hereby and
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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 or by other electronic means acceptable to the
parties authorized hereby which the Auction Agent believes in good
faith to have been given by the Trust or by a Broker-Dealer. The
Auction Agent may record telephone communications with the Trust
or with the Broker-Dealers or with 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.
The Auction Agent shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed in
writing with the Trust.
(d) The Auction Agent may perform its duties and exercise its
rights hereunder either directly or by or through agents or
attorneys.
(e) The Auction Agent shall have no obligation or liability with
respect to the registration or exemption therefrom of the AMPS
under the federal or state securities laws or with respect to the
sufficiency or the conformity of any transfer of the AMPS to the
terms of the Auction Agreement, the Broker-Dealer Agreements, the
AMPS or any other document contemplated thereby.
6.3. Auction Agent's Disclaimer.
The Auction Agent makes no representation as to the validity or the
adequacy of this Agreement, the Broker-Dealer Agreements or the AMPS.
6.4. Compensation, Expenses and Indemnification.
(a) The Trust shall pay to the Auction Agent reasonable
compensation for all services rendered by it under this Agreement
and under the Broker-Dealer Agreements as shall be agreed by the
Auction Agent and the Trust from time to time as shall be set
forth in a separate writing signed by the Trust and the Auction
Agent, subject to adjustments if the AMPS no longer are held of
record by the Securities Depository or its nominee or if there
shall be such other change as shall increase materially the
Auction Agent's obligations hereunder or under the Broker-Dealer
Agreements.
(b) The Trust shall reimburse the Auction Agent upon its request
for all reasonable expenses, disbursements and advances incurred
or made by the
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Auction Agent in accordance with any provision of this Agreement
and of the Broker-Dealer Agreements (including the reasonable
compensation, expenses and disbursements of its agents and
counsel), except any expense, disbursement or advance attributable
to its negligence or willful misconduct.
(c) The Trust shall indemnify the Auction Agent for, and hold it
harmless against, any loss, liability or expense incurred without
negligence or willful misconduct on its part arising out of or in
connection with its agency under this Agreement and under the
Broker-Dealer Agreements, including the costs and expenses of
defending itself against any claim of 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
willful misconduct.
VII. 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 Trust may
terminate this Agreement at any time by so notifying the Auction
Agent, provided that if any AMPS remain outstanding the Trust
shall have 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 Trust on the
date specified in such notice, which date shall be no earlier than
60 days after delivery of such notice. If the Auction Agent
resigns while any AMPS remain outstanding, the Trust 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 Trust and the Auction Agent
under this Agreement shall cease upon termination of this
Agreement. The Trust'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 Trust's request,
deliver promptly to the Trust copies of all books and records
maintained by it in connection with its duties hereunder, and
(iii) at the request of the Trust, transfer promptly to the Trust
or to any successor auction agent any funds deposited by the Trust
with the Auction Agent (whether in its capacity as Auction Agent
or as Paying Agent) pursuant to this Agreement which have not been
distributed previously by the Auction Agent in accordance with
this Agreement.
(c) If the AMPS shall no longer settle through an electronic
book entry system, the Auction Agent (but not necessarily the
Paying Agent) shall cease to perform its duties hereunder, and
under any Broker-Dealer Agreement.
7.2. Communications.
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Except for (i) communications authorized to be made by telephone (or by
other electronic means acceptable to the parties) 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 at its address
or telecopier number set forth below:
If to the Trust, MUNIYIELD PENNSYLVANIA INSURED FUND
addressed to: 000 Xxxxxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Treasurer
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
If to the Auction The Bank of New York
Agent, addressed to: Corporate Trust-Dealing and Trading Group
000 Xxxxxxx Xxxxxx, 0X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Auction Desk
Telephone No.: (000) 000-0000
Telecopier 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 the Trust by a Trust
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 Trust, 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, 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. The Trust shall notify
the Auction Agent of any change in the Articles
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Supplementary prior to the effective date of any such change. If
any such change in the Articles Supplementary materially increases
the Auction Agent's obligations hereunder, the Trust shall obtain
the written consent to the Auction Agent prior to the effective
date of 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. 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 the
Trust 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 withheld unreasonably.
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.
7.10. Personal Liability.
The Declaration of Trust organizing MuniYield Pennsylvania Insured Fund,
dated August 24, 1992, a copy of which, together with all amendments thereto
(the "Declaration"), is on file in the office of the Secretary of The
Commonwealth of Massachusetts, provides that the name "MuniYield Pennsylvania
Insured Fund" refers to the Trustees under the Declaration collectively as
Trustees, but not as individuals personally; and no Trustee, shareholder,
officer, employee or agent of the Trust shall be held to any personal
liability, nor shall resort be had to
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their private property for the satisfaction of any obligation or claim or
otherwise in connection with the affairs of the Trust, but the "Trust
Property" only shall be liable.
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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.
MUNIYIELD PENNSYLVANIA INSURED FUND
By:
---------------------------------
Name:
Title:
THE BANK OF NEW YORK
By:
---------------------------------
Name:
Title:
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