FORM OF BROKER-DEALER AGREEMENT
Dated as of
Relating to
AUCTION RATE MUNICIPAL PREFERRED STOCK
(the "Preferred Shares")
SERIES ___, SERIES ___, SERIES ___ and SERIES ___
of
THE BLACKROCK ________________________
BROKER-DEALER AGREEMENT dated as of ______________, between Deutsche
Bank, a New York banking corporation (the "Auction Agent") (not in its
individual capacity but solely as agent of The BlackRock __________________
(the "Company"), pursuant to authority granted to it in the Auction Agent
Agreement dated as of ______________, between the Company and the Auction
Agent (the "Auction Agent Agreement")) and ______________ (together with
its successors and assigns hereinafter referred to as "BD").
The Company has duly authorized and issued ____ shares of Auction
Rate Municipal Preferred Stock, Series ___, with a par value of $.0l 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) plus the premium, if any, resulting from the designation of a
Premium Call Period ("Series ___ Preferred Shares"), ____ shares of Auction
Rate Municipal Preferred Stock, Series ___, with a par value of $.0l 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) plus the premium, if any, resulting from the designation of a
Premium Call Period ("Series ___ Preferred Shares"), _____ shares of
Auction Rate Municipal Preferred Stock, Series ___, with a par value of
$.0l 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) plus the premium, if any, resulting from the designation of a
Premium Call Period ("Series ___ Preferred Shares") and ____ shares of
Auction Rate Municipal Preferred Stock, Series ___, with a par value of
$.0l 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) plus the premium, if any, resulting from the designation of a
Premium Call Period ("Series ____ Preferred Shares") each pursuant to the
Company's Articles Supplementary (as defined below). The Series ___
Preferred Shares, the Series ___ Preferred Shares, the Series ___ Preferred
Shares and the Series ___ Preferred Shares are sometimes herein together
referred to as the "Preferred Shares".
The Company's Articles Supplementary provide that the dividend rate
on the Series ___ Preferred Shares, the Series ___ Preferred Shares, the
Series ___ Preferred Shares and the Series ___ Preferred Shares for each
Dividend Period therefor after the Initial Dividend Period shall be the
Applicable Rate therefor, which in each case, in general, 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 (as defined below). The Board of Directors of the
Company has adopted a resolution appointing Deutsche Bank as Auction Agent
for purposes of the Auction Procedures, and pursuant to Section 2.5(d) of
the Auction Agent Agreement, the Company has authorized and directed the
Auction Agent to execute and deliver this Agreement.
The Auction Procedures require the participation of one or more
Broker-Dealers.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the Auction Agent and BD agree as follows:
1. Definitions and Rules of Construction.
1.1 Terms Defined by Reference to the Articles Supplementary.
Capitalized terms not defined herein shall have the respective meanings
specified in the Articles Supplementary of the Company.
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) "Articles Supplementary" shall mean the Articles
Supplementary of the Company, establishing the powers, preferences and
rights of the Series ___ Preferred Shares, the Series ___ Preferred Shares,
the Series ___ Preferred Shares and the Series ___ Preferred Shares filed
on ___________ in the office of the State Department of Assessments and
Taxation of the State of Maryland.
(b) "Auction" shall have the meaning specified in Section 3.1
hereof.
(c) "Auction Procedures" shall mean the Auction Procedures
that are set forth in Paragraph 11 of the Articles Supplementary.
(d) "Authorized Officer" shall mean each Senior Vice
President, Vice President, Assistant Vice President, Trust Officer,
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 of
this Agreement in a communication to BD.
(e) "BD Officer" shall mean each officer or employee of BD
designated as a "BD Officer" for purposes of this Agreement in a
communication to the Auction Agent.
(f) "Broker-Dealer Agreement" shall mean this Agreement
and any substantially similar agreement between the Auction Agent and a
Broker-Dealer.
(g) "Purchaser's Letter" shall mean a letter addressed to
the Company, the Auction Agent and a Broker-Dealer, substantially in the
form attached hereto as Exhibit A.
(h) "Settlement Procedures" shall mean the Settlement
Procedures attached hereto 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. Notification of Dividend Period and Advance Notice of Allocation
of Taxable Income.
(a) The provisions contained in paragraph 2 of the
Articles Supplementary concerning the notification of a Special Dividend
Period will be followed by the Auction Agent and BD and the provisions
contained therein are incorporated herein by reference in their entirety
and shall be deemed to be a part of this Agreement to the same extent as if
such provisions were fully set forth herein.
(b) Whenever the Company intends to include any net
capital gains or other taxable income in any dividend on Preferred Shares,
the Company will notify the Auction Agent of the amount to be so included
at least five Business Days prior to the Auction Date on which the
Applicable Rate for such dividend is to be established. Whenever the
Auction Agent receives such notice from the Company, it will in turn notify
BD, who, on or prior to such Auction Date, 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.
3. The Auction.
3.1 Purpose; Incorporation by Reference of Auction Procedures and
Settlement Procedures.
(a) On each Auction Date, the provisions of the Auction
Procedures will be followed by the Auction Agent for the purpose of
determining the Applicable Rate for the Series ___ Preferred Shares, the
Series ___ Preferred Shares, the Series ___ Preferred Shares or the Series
___ Preferred Shares, as the case may be, for the next Dividend Period
therefor. Each periodic operation of such procedures is hereinafter
referred to as an "Auction."
(b) All of the provisions contained in the Auction
Procedures and the Settlement Procedures are incorporated herein by
reference in their entirety and shall be deemed to be a part of this
Agreement to the same extent as if such provisions were fully set forth
herein.
(c) BD is delivering herewith a Purchaser's Letter
executed by BD and, in the case of _______________ , a list of persons to
whom BD will initially sell the Series ___ Preferred Shares, the Series
____ Preferred Shares, the Series ___ Preferred Shares and the Series ___
Preferred Shares, the number of shares of each such series of Preferred
Shares BD will sell to each such person and the number of shares of each
such series of Preferred Shares BD will hold for its own account. BD agrees
to act as, and assumes the obligations of and limitations and restrictions
placed upon, a Broker- Dealer under this Agreement. BD understands that
other Persons meeting the requirements specified in the definition of
"Broker-Dealer" contained in Paragraph 1 of the Articles Supplementary may
execute a Broker-Dealer Agreement and a Purchaser's Letter and participate
as Broker-Dealers in Auctions.
(d) BD and other Broker-Dealers may participate in
Auctions for their own accounts, provided that BD or such other
Broker-Dealers, as the case may be, has executed a Purchaser's Letter.
However, the Company may by notice to BD and all other Broker-Dealers
prohibit all Broker-Dealers from submitting Bids in Auctions for their own
accounts, provided that Broker-Dealers may continue to submit Hold Orders
and Sell Orders.
3.2 Preparation for Each Auction.
(a) Not later than 9:30 A.M. on each Auction Date for both
series of Preferred Shares, the Auction Agent shall advise BD by telephone
of the Maximum Applicable Rate in effect on such Auction Date 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 determined from the higher of the Special Dividend Period
Reference Rate and the Taxable Equivalent of the Short-Term Municipal Bond
Rate.
(b) In the event that the Auction Date for any Auction
shall be changed after the Auction Agent has 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 BD 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. Thereafter, BD shall
promptly notify customers of BD that BD believes are Existing Holders of
Series ___ Preferred Shares, Series ___ Preferred Shares, Series___
Preferred Shares or Series ___ Preferred Shares, as the case may be, of
such change in the Auction Date.
(c) The Auction Agent from time to time may request BD to
provide it with a list of the respective customers BD believes are Existing
Holders of shares of Series ____ Preferred Shares, Series ____ Preferred
Shares, Series ___ Preferred Shares or Series ____ Preferred Shares. BD
shall comply with any such request, and the Auction Agent shall keep
confidential any such information, including information received as to the
identity of Bidders in any Auction, and shall not disclose any such
information so provided to any Person other than the Company; and such
information shall not be used by the Auction Agent or its officers,
employees, agents or representatives for any purpose other than such
purposes as are described herein. The Auction Agent shall transmit any list
of customers BD believes are Existing Holders of Series ___ Preferred
Shares, Series ___ Preferred Shares, Series ___ Preferred Shares or Series
____ Preferred Shares and information related thereto only to its officers,
employees, agents or representatives in the Corporate Trust and Agency
Group who need to know such information for the purposes of acting in
accordance with this Agreement and shall prevent the transmission of such
information to others and shall cause its officers, employees, agents and
representatives to abide by the foregoing confidentiality restrictions;
provided, however, that the Auction Agent shall have no responsibility or
liability for the actions of any of its officers, employees, agents or
representatives after they have left the employ of the Auction Agent.
(d) The Auction Agent is not required to accept the
Purchaser's Letter for any Potential Holder for an Auction unless it is
received by the Auction Agent by 3:00 P.M. on the Business Day next
preceding such Auction.
3.3 Auction Schedule; Method of Submission of Orders.
(a) The Company and the Auction Agent shall conduct
Auctions for both series of Preferred Shares in accordance with the
schedule set forth below. Such schedule may be changed at any time by the
Auction Agent with the consent of the Company, which consent shall not be
unreasonably withheld. The Auction Agent shall give notice of any such
change to BD. 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 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 3.2(a) hereof.
9:30 A.M. - 1:00 P.M. Auction Agent assembles information
communicated to it by Broker-Dealers as provided
in Paragraph 11(c)(i) of the Articles
Supplementary. Submission Deadline is 1:00 P.M.
Not earlier than 1:00 P.M. Auction Agent makes determinations pursuant to
Paragraph 11(d)(i) of the Articles Supplementary.
By approximately 3:00 P.M. Auction Agent advises Company of results of
Auction as provided in Paragraph 11(d)(ii) of
the Articles Supplementary.
Submitted Bids and Submitted Sell Orders are
accepted and rejected in whole or in part and
shares of Preferred Shares are allocated as
provided in Paragraph 11(e) of the Articles
Supplementary.
Auction Agent gives notice of Auction results as
set forth in Section 3.4(a) hereof.
(b) BD agrees to maintain a list of Potential Holders and
to contact the Potential Holders on such list on or prior to each Auction
Date for the purposes set forth in Paragraph 11 of the Articles
Supplementary.
(c) BD agrees not to sell, assign or dispose of any Series
___ Preferred Shares, Series ___ Preferred Shares, Series ___ Preferred
Shares or Series ___ Preferred Shares to any Person who has not delivered a
signed Purchaser's Letter to the Auction Agent.
(d) BD shall submit Orders to the Auction Agent in writing
in substantially the form attached hereto as Exhibit ___. BD shall submit
separate Orders to the Auction Agent for each Potential Holder or Existing
Holder on whose behalf BD is submitting an Order and shall not net or
aggregate the Orders of Potential Holders or Existing Holders on whose
behalf BD is submitting Orders.
(e) BD shall deliver to the Auction Agent (i) a written
notice, substantially in the form attached hereto as Exhibit ___, of
transfers of Series ___ Preferred Shares, Series ___ Preferred Shares,
Series ___ Preferred Shares or Series ___ Preferred Shares made through BD
by an Existing Holder to another Person other than pursuant to an Auction,
and (ii) a written notice, substantially in the form attached hereto as
Exhibit ___, of the failure of any Series ___ Preferred Shares, Series ___
Preferred Shares, Series ___ Preferred Shares or Series ___ Preferred
Shares to be transferred to or by any Person that purchased or sold Series
___ Preferred Shares, Series ___ Preferred Shares, Series ___ Preferred
Shares, Series ___ Preferred Shares or through ___ pursuant to an Auction.
The Auction Agent is not required to accept any notice delivered pursuant
to the terms of the foregoing sentence with respect to an Auction unless it
is received by the Auction Agent by 3:00 P.M. on the Business Day next
preceding the applicable Auction Date.
3.4 Notice of Auction Results.
(a) On each Auction Date, the Auction Agent shall notify
BD by telephone as set forth in paragraph (a) of the Settlement Procedures.
On the Business Day next succeeding such Auction Date, the Auction Agent
shall notify BD in writing of the disposition of all Orders submitted by BD
in the Auction held on such Auction Date.
(b) BD shall notify each Existing Holder or Potential
Holder on whose behalf BD has submitted an Order as set forth in paragraph
(b) of the Settlement Procedures and take such other action as is required
of BD pursuant to the Settlement Procedures.
If any Existing Holder selling Preferred Shares in an Auction
fails to deliver such shares, the BD of any Person that was to have
purchased Series ___ Preferred Shares, Series ___ Preferred Shares, Series
___ Preferred Shares or Series ___ Preferred Shares in such Auction may
deliver to such Person a number of whole shares of such Series ___
Preferred Shares, Series ___ Preferred Shares, Series ___ Preferred Shares
or Series ___ Preferred Shares, as the case may be, that is less than the
number of shares that otherwise was to be purchased by such Person. In such
event, the number of such Series ___ Preferred Shares, Series ___ Preferred
Shares, Series ___ Preferred Shares or Series ___ Preferred Shares to be so
delivered shall be determined by such BD. Delivery of such lesser number of
shares shall constitute good delivery. Upon the occurrence of any such
failure to deliver shares, such BD shall deliver to the Auction Agent the
notice required by Section 3.3(e)(ii) hereof. Notwithstanding the foregoing
terms of this Section 3.4(b), any delivery or non-delivery of Series ___
Preferred Shares, Series ___ Preferred Shares, Series ___ Preferred Shares
or Series ___ Preferred Shares which represents any departure from the
results of an Auction, as determined by the Auction Agent, shall be of no
effect unless and until the Auction Agent shall have been notified of such
delivery or non-delivery in accordance with the terms of Section 3.3(e)(ii)
hereof. The Auction Agent shall have no duty or liability with respect to
enforcement of this Section 3.4(b).
3.5 Service Charge to Be Paid to BD. On the Business Day
nextsucceeding each Auction Date for each series of Preferred Shares, the
Auction Agent shall pay to BD from moneys received from the Company an
amount equal to, (a) in the case of any Auction Date immediately preceding
any Dividend Period of 28 days or less, the product of (i) 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 (ii) 1/4
of 1%, times (iii) $25,000, times (iv) the sum of (A) the aggregate number
of shares of such series of Preferred Shares placed by BD in the applicable
Auction that were (x) the subject of a Submitted Bid of an Existing Holder
submitted by BD and continued to be held as a result of such submission and
(y) the subject of a Submitted Bid of a Potential Holder submitted by BD
and were purchased as a result of such submission plus (B) the aggregate
number of shares of such series of Preferred Shares subject to valid Hold
Orders (determined in accordance with Paragraph 11 of the Articles
Supplementary) submitted to the Auction Agent by BD plus (C) the number of
shares of such series of Preferred Shares deemed to be subject to Hold
Orders by Existing Holders pursuant to Paragraph 11 of the Articles
Supplementary that were acquired by such Existing Holders through BD and
(b) in the case of any Auction Date immediately preceding any Dividend
Period of 35 days or more, that amount as mutually agreed on by the Company
and BD, based on a selling concession that would be applicable to an
underwriting of fixed or variable rate preferred shares with a similar
final maturity or variable rate dividend period, respectively, at the
commencement of the Dividend Period with respect to such Auction. For the
purposes of calculating any such fee, Preferred Shares will be placed by a
Broker-Dealer if such shares were (i) the subject of Hold Orders deemed to
have been made by Existing Holders that were acquired by such Existing
Holders through such Broker-Dealer or (ii) the subject of the following
Orders submitted by such Broker- Dealer: (A) a Submitted Bid of an Existing
Holder that resulted in such Existing Holder continuing to hold such shares
as a result of the Auction, (B) a Submitted Bid of a Potential Holder that
resulted in such Potential Holder purchasing such shares as a result of the
Auction or (C) a Submitted Hold Order.
For purposes of subclause (iv) (C) of the foregoing sentence,
if any Existing Holder who acquired Series ___ Preferred Shares, Series ___
Preferred Shares, Series ___ Preferred Shares or Series ___ Preferred
Shares through BD transfers those shares to another Person other than
pursuant to an Auction, then the Broker-Dealer for the shares so
transferred shall continue to be BD, provided, however, that if the
transfer was effected by, or if the transferee is, a Broker-Dealer other
than BD, then such Broker- Dealer shall be the Broker-Dealer for such
shares.
4. The Auction Agent.
4.1 Duties and Responsibilities.
(a) The Auction Agent is acting solely as agent for the
Company hereunder and owes no fiduciary duties to any other Person by
reason of this Agreement.
(b) The Auction Agent undertakes to perform such duties
and only such duties as are specifically set forth in this Agreement, and
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.
4.2 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 by this
Agreement and upon any written instruction, notice, request, direction,
consent, report, certificate, share certificate or other instrument, paper
or document believed by it to be genuine. The Auction Agent shall not be
liable for acting upon any telephone communication authorized by this
Agreement which the Auction Agent believes in good faith to have been given
by the Company or by BD. The Auction Agent may record telephone
communications with BD.
(b) The Auction Agent may consult with counsel of its own
choice, and the advice of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon.
(c) The Auction Agent shall not be required to advance,
expend or risk its own funds or 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.
4.3 Auction Agent's Disclaimer. The Auction Agent makes no
representation as to the validity or adequacy of this Agreement or the
Series ___ Preferred Shares, the Series ___ Preferred Shares, the Series
___ Preferred Shares or the Series ___ Preferred Shares.
5. Miscellaneous.
5.1 Termination. Any party may terminate this Agreement at any
time upon five days' prior notice to the other party.
5.2 Agent Member. At the date hereof, BD is a participant of the
Securities Depository.
5.3 Communications. Except for (i) communications authorized to
be made by telephone pursuant to this Agreement or the Auction Procedures
and (ii) communications in connection with the Auctions (other than those
expressly required to be in writing), all notices, requests and other
communications to any party hereunder shall be in writing (including
telecopy or similar writing) and shall be given to such party, addressed to
it, at its address or telecopy number set forth below:
If to BD addressed: ___________________
___________________
___________________
___________________
Attention: ___________________
Telecopier No.:___________________
Telephone No.: ___________________
If to the Auction Agent, addressed:
Deutsche Bank
0 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Auction Rate Securities
Telecopier No.: (000) 000-0000
Telephone 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 BD by a BD
Officer and on behalf of the Auction Agent by an Authorized Officer. BD may
record telephone communications with the Auction Agent.
5.4 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.
5.5 Benefits. Nothing in this Agreement, express or implied,
shall give to any person, other than the Company, the Auction Agent and BD
and their respective successors and assigns, any benefit of any legal or
equitable right, remedy or claim under this Agreement.
5.6 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.
(b) Failure of either party to this Agreement to exercise
any right or remedy hereunder in the event of a breach of this Agreement by
the other party shall not constitute a waiver of any such right or remedy
with respect to any subsequent breach.
5.7 Successors and Assigns. This Agreement shall be binding
upon, inure to the benefit of, and be enforceable by, the respective
successors and permitted assigns of each of BD and the Auction Agent. This
Agreement may not be assigned by either party hereto absent the prior
written consent of the other party; provided, however, that this Agreement
may be assigned by the Auction Agent to a successor Auction Agent selected
by the Company without the consent of BD.
5.8 Severability. If any clause, provision or section of this
Agreement shall be ruled invalid or unenforceable by any court of competent
jurisdiction, the invalidity or unenforceability of such clause, provision
or section shall not affect any remaining clause, provision or section
hereof.
5.9 Execution in Counterparts. This Agreement may be executed
in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.
5.10 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable
to agreements made and to be performed in said State.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers
as of the date first above written.
DEUTSCHE BANK
By:____________________________________
Title:
By:____________________________________
Title:
EXHIBIT A
TO BE SUBMITTED TO YOUR BROKER-DEALER WHO WILL
THEN DELIVER COPIES ON YOUR BEHALF TO THE RESPECTIVE
TRUST COMPANY OR REMARKETING AGENT.
MASTER PURCHASER'S LETTER
Relating to Securities Involving Rate Settings Through Auctions or Remarketings
The Company A Remarketing Agent
The Trust Company A Broker-dealer
An Agent Member Other Persons
Dear Sirs:
1. This letter is designed to apply to publicly or privately offered
debt or equity securities ("Securities") of any issuer ("Company") which
are described in any final prospectus or other offering materials relating
to such Securities as the same may be amended or supplemented
(collectively, with respect to the particular Securities concerned, the
"Prospectus") and which involve periodic rate settings through auctions
("Auctions") or remarketing procedures ("Remarketings"). This letter shall
be for the benefit of any Company and of any trust company, auction agent,
paying agent (collectively, "trust company"), remarketing agent,
broker-dealer, agent member, securities depository or other interested
person in connection with any Securities and related Auctions or
Remarketings (it being understood that such persons may be required to
execute specified agreements and nothing herein shall alter such
requirements). The terminology used herein is intended to be general in its
application and not to exclude any Securities in respect of which (in the
Prospectus or otherwise) alternative terminology is used.
2. We may from time to time offer to purchase, purchase, offer to
sell and/or sell Securities of any Company as described in the Prospectus
relating thereto. We agree that this letter shall apply to all such
purchases, sales and offers and to Securities owned by us. We understand
that the dividend/interest rate on Securities may be based from time to
time on the results of Auctions or Remarketings as set forth in the
Prospectus.
3. We agree that any bid or sell order placed by us in an Auction or
a Remarketing shall constitute an irrevocable offer (except as otherwise
described in the Prospectus) by us to purchase or sell the Securities
subject to such bid or sell order, or such lesser amount of Securities as
we shall be required to sell or purchase as a result of such Auction or
Remarketing, at the applicable price, all as set forth in the Prospectus,
and that if we fail to place a bid or sell order with respect to Securities
owned by us with a broker-dealer on any Auction or Remarketing date, or a
broker-dealer to which we communicate a bid or sell order fails to submit
such bid or sell order to the trust company or remarketing agent concerned,
we shall be deemed to have placed a hold order with respect to such
Securities as described in the Prospectus. We authorize any broker-dealer
that submits a bid or sell order as our agent in Auctions or Remarketings
to execute contracts for the sale of Securities covered by such bid or sell
order. We recognize that the payment by such broker-dealer for Securities
purchased on our behalf shall not relieve us of any liability to such
broker-dealer for payment for such Securities.
4. We understand that in a Remarketing, the dividend or interest rate
or rates on the Securities and the allocation of Securities tendered for
sale between dividend or interest periods of different lengths will be
based from time to time on the determinations of one or more remarketing
agents, and we agree to be conclusively bound by such determinations. We
further agree to the payment of different dividend or interest rates to
different holders of Securities depending on the length of the dividend or
interest period elected by such holders. We agree that any notice given by
us to a remarketing agent (or to a broker-dealer for transmission to a
remarketing agent) of our desire to tender Securities in a Remarketing
shall constitute an irrevocable (except to the limited extent set forth in
the Prospectus) offer by us to sell the Securities specified in such
notice, or such lesser number of Securities as we shall be required to sell
as a result of such Remarketing in accordance with the terms set forth in
the Prospectus, and we authorize the remarketing agent to sell, transfer or
otherwise dispose of such Securities as set forth in the Prospectus.
5. We agree that, during the applicable period as described in
the Prospectus, dispositions of Securities can be made only in the
denominations set forth in the Prospectus and we will sell, transfer or
otherwise dispose of any Securities held by us from time to time only
pursuant to a bid or sell order placed in an Auction, in a Remarketing, to
or through a broker-dealer or, when permitted in the Prospectus, to a
person that has signed and delivered to the applicable trust company or a
remarketing agent a letter substantially in the form of this letter (or
other applicable purchaser's letter) provided that in the case of all
transfers other than pursuant to Auctions or Remarketings we or our
broker-dealer or our agent member shall advise such trust company or a
remarketing agent of such transfer. We understand that a restrictive legend
will be placed on certificates representing the Securities and
stop-transfer instructions will be issued to the transfer agent and/or
registrar, all as set forth in the Prospectus.
6. We agree that, during the applicable period as described in the
Prospectus, ownership of Securities shall be represented by one or more
global certificates registered in the name of the applicable securities
depository or its nominee that we will not be entitled to receive any
certificate representing the Securities and that our ownership of any
Securities will be maintained in book entry form by the securities
depository for the account of our agent member, which in turn will maintain
records of our beneficial ownership. We authorize and instruct our agent
member to disclose to the applicable trust company or remarketing agent
such information concerning our beneficial ownership of Securities as such
trust company or remarketing agent shall request.
7. We acknowledge that partial deliveries of Securities purchased in
Auctions or Remarketings may be made to us and such deliveries shall
constitute good delivery as set forth in the Prospectus.
8. This letter is not a commitment by us to purchase any Securities.
9. This letter supersedes any prior-dated version of this master
purchaser's letter, and supplements any prior or post-dated purchaser's
letter specific to particular Securities, and this letter may only be
revoked by a signed writing delivered to the original recipients hereof.
10. The descriptions of Auction or Remarketing procedures set forth
in each applicable Prospectus are incorporated by reference herein and in
case of any conflict between this letter, any purchaser's letter specific
to particular Securities and any such description, such description shall
control.
11. Any xerographic or other copy of this letter shall be deemed of
equal effect as a signed original.
12. Our agent member of The Depository Trust Company currently is
__________________________________________________________.
13. Our personnel authorized to place orders with broker-dealers for
the purposes set forth in the Prospectus in Auctions or Remarketings
currently is/are , telephone number ( ) - .
14. Our taxpayer identification number is __________________________.
15. In the case of each offer to purchase, purchase, offer to sell or
sale by us of Securities not registered under the Securities Act of 1933,
as amended (the "Act"), we represent and agree as follows:
A. We understand and expressly acknowledge that the Securities
have not been and will not be registered under the Act and,
accordingly, that the Securities may not be reoffered, resold or
otherwise pledged, hypothecated or transferred unless an applicable
exemption from the registration requirements of the Act is available.
B. We hereby confirm that any purchase of Securities made by us
will be for our own account, or for the account of one or more
parties for which we are acting as trustee or agent with complete
investment discretion and with authority to bind such parties, and
not with a view to any public resale or distribution thereof. We and
each other party for which we are acting which will acquire
Securities will be "accredited investors" within the meaning of
Regulation D under the Act with respect to the Securities to be
purchased by us or such party, as the case may be, will have
previously invested in similar types of instruments and will be able
and prepared to bear the economic risk of investing in and holding
such Securities.
C. We acknowledge that prior to purchasing any Securities we
shall have received a Prospectus (or private placement memorandum)
with respect thereto and acknowledge that we will have had access to
such financial and other information, and have been afforded the
opportunity to ask such questions of representatives of the Company
and receive answers thereto, as we deem necessary in connection with
our decision to purchase Securities.
D. We recognize that the Company and broker-dealers will rely
upon the truth and accuracy of the foregoing investment
representations and agreements, and we agree that each of our
purchases of Securities now or in the future shall be deemed to
constitute our concurrence in all of the foregoing which shall be
binding on us and each party for which we are acting as set forth in
Subparagraph B above.
_________________________________________
(Name of Purchaser)
By_______________________________________
Printed Name:
Title:
Dated:__________________________
Mailing Address of Purchaser
________________________________
________________________________
________________________________
EXHIBIT B
SETTLEMENT PROCEDURES
The following summary of Settlement Procedures sets forth the
procedures expected to be followed in connection with the settlement of
each Auction and will be incorporated by reference in the Auction Agent
Agreement and each Broker-Dealer Agreement. Nothing contained in this
Appendix constitutes a representation by the Trust that in each Auction
each party referred to herein will actually perform the procedures
described herein to be performed by such party. Capitalized terms used
herein shall have the respective meanings specified in the Articles
Supplementary.
(a) On each Auction Date, the Auction Agent shall notify by
telephone the Broker-Dealers that participated in the Auction held on
such Auction Date and submitted an Order on behalf of any Existing
Holder or Potential Holder of:
(i) the Applicable Rate fixed for the next succeeding
Dividend Period;
(ii) whether Sufficient Clearing Bids existed for the
determination of the Applicable Rate;
(iii) if such Broker-Dealer (a "Seller's Broker-Dealer")
submitted a Bid or Sell Order on behalf of an Existing Holder,
the number of shares, if any, of Preferred Shares to be sold by
such Existing Holder;
(iv) if such Broker-Dealer (a "Buyer's Broker-Dealer")
submitted a Bid on behalf of a Potential Holder, the number of
shares, if any, of Preferred Shares to be purchased by such
Potential Holder;
(v) if the aggregate number of Preferred Shares to be
sold by all Existing Holders on whose behalf such Broker-Dealer
submitted a Bid or a Sell Order exceeds the aggregate number of
Preferred Shares to be purchased by all potential Holders on
whose behalf such Broker-Dealer submitted a Bid, the name or
names of one or more Buyer's Broker- Dealers (and the name of
the Agent Member, if any, of each such Buyer's Broker-Dealer)
acting for one or more purchasers of such excess number of
Preferred Shares and the number of such shares to be purchased
from one or more Existing Holders on whose behalf such
Broker-Dealer acted by one or more Potential Holders on whose
behalf each of such Buyer's Broker-Dealers acted;
(vi) if the aggregate number of Preferred Shares to be
purchased by all Potential Holders on whose behalf such
Broker-Dealer submitted a Bid exceeds the aggregate number of
Preferred Shares to be sold by all Existing Holders on whose
behalf such Broker-Dealer submitted a Bid or a Sell Order, the
name or names of one or more Seller's Broker-Dealers (and the
name of the Agent Member, if any, of each such Seller's
Broker-Dealer) acting for one or more sellers of such excess
number of Preferred Shares and the number of such shares to be
sold to one or more Potential Holders on whose behalf such
Broker- Dealer acted by one or more Existing Holders on whose
behalf each of such Seller's Broker-Dealers acted; and
(vii) the Auction Date of the next succeeding Auction
with respect to the Preferred Shares.
(b) On each Auction Date, each Broker-Dealer that submitted an
Order on behalf of any Existing Holder or Potential Holder shall:
(i) in the case of a Broker-Dealer that is a Buyer's
Broker- Dealer, instruct each Potential Holder on whose behalf
such Broker-Dealer submitted a Bid that was accepted, in whole
or in part, to instruct such Potential Holder's Agent Member to
pay to such Broker-Dealer (or its Agent Member) through the
Securities Depository the amount necessary to purchase the
number of Preferred Shares to be purchased pursuant to such Bid
against receipt of such shares and advise such Potential Holder
of the Applicable Rate for the next succeeding Dividend Period;
(ii) in the case of a Broker-Dealer that is a Seller's
Broker-Dealer, instruct each Existing Holder on whose behalf
such Broker-Dealer submitted a Sell Order that was accepted,
in whole or in part, or a Bid that was accepted, in whole or in
part, to instruct such Existing Holder's Agent Member to
deliver to such Broker-Dealer (or its Agent Member) through the
Securities Depository the number of Preferred Shares to be sold
pursuant to such Order against payment therefor and advise any
such Existing Holder that will continue to hold Preferred
Shares of the Applicable Rate for the next succeeding Dividend
Period;
(iii) advise each Existing Holder on whose behalf such
Broker-Dealer submitted a Hold Order of the Applicable Rate
for the next succeeding Dividend Period;
(iv) advise each Existing Holder on whose behalf such
Brokerer-Dealer submitted an Order of the Auction Date for the
next succeeding Auction; and
(v) advise each Potential Holder on whose behalf such
Broker-Dealer submitted a Bid that was accepted, in whole or in
part, of the Auction Date for the next succeeding Auction.
(c) On the basis of the information provided to it pursuant to
(a) above, each Broker-Dealer that submitted a Bid or a Sell Order on
behalf of a Potential Holder or an Existing Holder shall, in such
manner and at such time or times as in its sole discretion it may
determine, allocated any funds received by it pursuant to (b)(i)
above and any Preferred Shares received by it pursuant to (b)(ii)
above among the Potential Holders, if any, on whose behalf such
Broker-Dealer submitted Bids, the Existing Holders, if any, on whose
behalf such Broker-Dealer submitted Bids that were accepted or Sell
Orders, and any Broker-Dealer or Broker-Dealers identified to it by
the Auction Agent pursuant to (a)(v) or (a)(vi) above.
(d) On each Auction Date:
(i) each Potential Holder and Existing Holder shall
instruct its Agent Member as provided in (b)(i) or (ii) above,
as the case may be;
(ii) each Seller's Broker-Dealer which is not an Agent
Member of the Securities Depository shall instruct its Agent
Member to (A) pay through the Securities Depository to the
Agent Member of the Existing Holder delivering shares to such
Broker-Dealer pursuant to (b)(ii) above the amount necessary to
purchase such shares against receipt of such shares, and (B)
deliver such shares through the Securities Depository to a
Buyer's Broker-Dealer (or its Agent Member) identified to such
Seller's Broker-Dealer pursuant to (a)(v) above against payment
therefor; and
(iii) each Buyer's Broker-Dealer which is not an Agent
Member of the Securities Depository shall instruct its Agent
Member to (A) pay through the Securities Depository to a
Seller's Broker-Dealer (or its Agent Member) identified pursuant
to (a)(vi) above the amount necessary to purchase the shares to
be purchased pursuant to (b)(i) above against receipt of such
shares, and (B) deliver such shares through the Securities
Depository to the Agent Member of the purchaser thereof against
payment therefor.
(e) On the day after the Auction Date:
(i) each Bidder's Agent Member referred to in (d)(i)
above shall instruct the Securities Depository to execute the
transactions described under (b)(i) or (ii) above, and the
Securities Depository shall execute such transactions;
(ii) each Seller's Broker-Dealer or its Agent Member
shall instruct the Securities Depository to execute the
transactions described in (d)(ii) above, and the Securities
Depository shall execute such transactions; and
(iii) each Buyer's Broker-Dealer or its Agent Member
shall instruct the Securities Depository to execute the
transactions described in (d)(iii) above, and the Securities
Depository shall execute such transactions.
(f) If an Existing Holder selling Preferred Shares in an
Auction fails to deliver such shares (by authorized book-entry), a
Broker-Dealer may deliver to the Potential Holder on behalf of which
it submitted a Bid that was accepted a number of whole Preferred
Shares that is less than the number of shares that otherwise was to
be purchased by such Potential Holder. In such event, the number of
Preferred Shares to be so delivered shall be determined solely by
such Broker-Dealer. Delivery of such lesser number of shares shall
constitute good delivery. Notwithstanding the foregoing terms of this
paragraph (f), any delivery or non-delivery of shares which shall
represent any departure from the results of an Auction, as determined
by the Auction Agent, shall be of no effect unless and until the
Auction Agent shall have been notified of such delivery or
non-delivery in accordance with the provisions of the Auction Agent
Agreement and the Broker-Dealer Agreements.
EXHIBIT C
DEUTSCHE BANK AUCTION BID FORM
Submit To: Deutsche Bank Issue:The BlackRock
0 Xxxxxx Xxxxxx Insured Municipal 0000
Xxx Xxxx, Xxx Xxxx 00000 Term Trust Inc.
Series:
Auction Date:
Attention: Auction Rate Securities Telephone(212) 000-0000
Facsimile(212) 250-6850
The undersigned Broker-Dealer submits the following Order on behalf
of the Bidder listed below:
Name of Bidder:____________________
EXISTING HOLDER
Shares now held _____________________ HOLD_____________________________
BID at rate of __________________
SELL ____________________________
POTENTIAL HOLDER
# of shares bid _________________
BID at rate of __________________
Notes:
(1) If submitting more than one Bid for one Bidder, use additional
Auction Bid Forms.
(2) If one or more Bids covering in the aggregate more than the number of
outstanding shares held by any Existing Holder are submitted, such
Bids shall be considered valid in the order of priority set forth in
the Auction Procedures on the above issue.
(3) A Hold or Sell may be placed only by an Existing Holder covering a
number of shares not greater than the number of shares currently
held.
(4) Potential Holders may make only Bids, each of which must specify a
rate. If more than one Bid is submitted on behalf of any Potential
Holder, each Bid submitted shall be a separate Bid with the rate
specified.
(5) Bids may contain no more than three figures to the right of the
decimal point (.001 of 1%). Fractions will not accepted.
NAME OF BROKER-DEALER ___________________
Authorized Signature ____________________
EXHIBIT D
(To be used only for transfers made other than pursuant to an Auction).
TRANSFER FORM
Re: The BlackRock _____________________________________ Series [ ] [ ]
[ ] [ ] Preferred Shares (the "Preferred Shares")
We are (check one):
o the Existing Holder named below;
o the Broker-Dealer for such Existing Holder; or
o the Agent Member for such Existing Holder.
We hereby notify you that such Existing Holder has transferred _____
shares of [Series ___] [Series ___] [Series ___] [Series ___] Preferred
Shares to __________.
_____________________________________________
(Name of Existing Holder)
_____________________________________________
(Name of Broker-Dealer)
_____________________________________________
(Name of Agent Member)
By:__________________________________________
Printed Name:
Title:
EXHIBIT E
(To be used only for failures to deliver Preferred Shares sold pursuant to
an Auction)
NOTICE OF A FAILURE TO DELIVER
Complete either I or II
I. We are a Broker-Dealer for _________________ (the "Purchaser"),
which purchased _______ Series [ ][ ][ ][ ] Preferred Shares of
The BlackRock _____________________ in the Auction held on
___________ from the seller of such shares.
II. We are a Broker-Dealer for _________________ (the "Seller"), which
sold _______ Series [ ][ ][ ][ ] Preferred Shares of The
BlackRock ________________________ in the Auction held on
____________ to the Purchaser of such shares.
We hereby notify you that (check one) --
_________ the Seller failed to deliver such shares to the Purchaser
_________ the Purchaser failed to make payment to the Seller upon
delivery of such shares
Name:_________________________________________
(Name of Broker-Dealer
By: __________________________________________
Printed Name:
Title:
