Exhibit k.2
INTERMEDIATE MUNI FUND, INC.
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FORM OF AUCTION AGENCY AGREEMENT
dated as of ____________ ___, 2002
Relating to
Municipal Auction Rate Cumulative Preferred Stock, Series M
of
Intermediate Muni Fund, Inc.
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BANKERS TRUST COMPANY,
as Auction Agent
AUCTION AGENCY AGREEMENT dated as of January __, 2002 between INTERMEDIATE
MUNI FUND, INC., a Maryland corporation (the "Fund"), and BANKERS TRUST COMPANY,
a New York corporation (the "Auction Agent").
WHEREAS, the Fund proposes to offer, issue and sell shares of Municipal
Auction Rate Cumulative Preferred Stock, Series M ("Preferred Shares") pursuant
to its Articles of Incorporation, as amended by the Articles Supplementary (as
defined below). The Fund desires that the Auction Agent perform certain duties
as agent in connection with each Auction (as defined below) of Preferred Shares
upon the terms and subject to the conditions of this Agreement, and the Fund
hereby appoints the Auction Agent to act in the capacities set forth in this
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the Fund and the Auction Agent agree as follows:
1. Definitions and Rules of Construction.
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1.1. Terms Defined by Reference to the Articles Supplementary.
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Capitalized terms not defined herein shall have the respective
meanings specified in Parts I and II of the Articles Supplementary.
1.2. Terms Defined Herein.
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As used herein and in the Settlement Procedures, the following terms
shall have the following meanings, unless the context otherwise requires:
(a) "Agent Member" of any Person shall mean such Person's agent member
of, or a participant in, the Securities Depository that will act on behalf of a
Person.
(b) "Articles Supplementary" shall mean the Articles Supplementary
Creating and Fixing the Rights of Municipal Auction Rate Cumulative Preferred
Stock, Series M filed by the Fund in the office of the State Department of
Assessments and Taxation of the State of Maryland.
(c) "Auction" shall have the meaning specified in Section 2.1 hereof.
(d) "Auction Procedures" shall mean the auction procedures
constituting Part II of the Articles Supplementary.
(e) "Authorized Officer" shall mean each Managing Director, Vice
President, Assistant Vice President, and Associate of the Auction Agent assigned
to its Corporate Trust and Agency Group and every other officer or employee of
the Auction Agent designated as an "Authorized Officer" for purposes hereof in a
written communication from the Auction Agent to the Fund.
(f) "Broker-Dealer Agreement" shall mean each agreement among the
Fund, the Auction Agent and a Broker-Dealer substantially in the form attached
hereto as Exhibit A.
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(g) "Fund Officer" shall mean the Chairman of the Board of Directors,
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 Fund
and every other officer or employee of the Fund designated as a "Fund Officer"
for purposes hereof in a notice from the Fund to the Auction Agent.
(h) "Preferred Shares" shall mean the preferred stock, par value $.001
per share, liquidation preference $25,000 per share, of the Fund designated as
its "Municipal Auction Rate Cumulative Preferred Stock, Series M."
(i) "Settlement Procedures" shall mean the Settlement Procedures
attached hereto as Exhibit B.
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1.3. Rules of Construction.
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Unless the context or use indicates another or different meaning or
intent, the following rules shall apply to the construction of this Agreement:
(a) Words importing the singular number shall include the plural
number and vice versa.
(b) The captions and headings herein are solely for convenience of
reference and shall not constitute a part of this Agreement nor shall they
affect its meaning, construction or effect.
(c) The words "hereof", "herein", "hereto" and other words of similar
import refer to this Agreement as a whole.
(d) All references herein to a particular time of day shall be to New
York City time.
2. The Auction.
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2.1. Purpose; Incorporation by Reference of Auction Procedures and
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Settlement Procedures.
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(a) The Articles Supplementary provide that the Applicable Rate on
Preferred Shares for each Subsequent Rate Period after the Initial Rate Period
thereof shall, except under certain conditions, be the rate per annum that a
commercial bank or trust company appointed by
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the Fund advises results from implementation of the Auction Procedures for
Preferred Shares. The Board of Directors of the Fund has adopted a resolution
appointing Bankers Trust Company as Auction Agent for purposes of the Auction
Procedures for Preferred Shares. 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 Preferred Shares for each
Subsequent Rate Period thereof for which the Applicable Rate is to be determined
by an Auction. Each periodic implementation of such procedures is hereinafter
referred to as an "Auction."
(b) All of the provisions contained in the Auction Procedures and the
Settlement Procedures are incorporated herein by reference in their entirety and
shall be deemed to be a part hereof to the same extent as if such provisions
were fully set forth herein.
2.2. Preparation for Each Auction; Maintenance of Registry of Beneficial
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Owners.
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(a) Not later than seven days prior to the first Auction Date for the
Preferred Shares, the Fund shall provide the Auction Agent with a list of the
Broker-Dealers. Not later than seven days prior to any Auction Date for
Preferred Shares for which any change in such list of Broker-Dealers is to be
effective, the Fund will notify the Auction Agent in writing of such change and,
if any such change involves the addition of a Broker-Dealer to such list, shall
cause to be delivered to the Auction Agent for execution by the Auction Agent a
Broker-Dealer Agreement manually signed by such Broker-Dealer; provided,
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however, that if the Fund proposes to designate any Special Rate Period of
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Preferred Shares pursuant to Section 4 of Part I of the Articles Supplementary,
not later than 11:00 A.M. on the Business Day next preceding the Auction next
preceding the first day of such Rate Period, the Fund shall provide the Auction
Agent with a list of the Broker-Dealers and a manually signed copy of each
Broker-Dealer Agreement or a new Schedule A to a Broker-Dealer Agreement (which
Schedule A shall replace and supersede any previous Schedule A to such
Broker-Dealer Agreement) with each Broker-Dealer. The Auction Agent and the Fund
shall have 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 any Auction Date shall be changed after the
Auction Agent shall have given the notice referred to in clause (vi) of
paragraph (a) of the Settlement Procedures, or, after the notice referred to in
Section 2.5(a) hereof, if applicable, 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) (i) The Auction Agent shall maintain a registry of the beneficial
owners of the shares of Preferred Shares, who shall constitute Existing Holders
of Preferred Shares for purposes of Auctions and shall indicate thereon the
identity of the respective Broker-Dealer of each Existing Holder, if any, on
whose behalf such Broker-Dealer submitted the most recent order in any Auction
which resulted in such Existing Holder continuing to hold or purchasing shares
of Preferred Shares. The Auction Agent shall keep such registry current and
accurate. The Fund shall provide or cause to be provided to the Auction Agent at
or prior to the Date of Original Issue a list of the initial Existing Holders of
the Preferred Shares, the number of
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Preferred Shares purchased by each such Existing Holder and the respective
Broker-Dealer of each such Existing Holder or the affiliate thereof through
which each such Existing Holder purchased such shares.
(ii) In the event of any partial redemption of Preferred Shares, the
Auction Agent shall, at least two Business Days prior to the next Auction for
Preferred Shares, request the Securities Depository of each Existing Holder of
shares of Preferred Shares to disclose to the Auction Agent (upon selection by
the Securities Depositary of the Existing Holders whose shares are to be
redeemed) the number of shares of Preferred Shares, if any, of such Existing
Holder which are subject to such redemption, provided the Auction Agent has been
furnished, at least three Business Days prior to such Auction, with the name and
telephone number of a person or department at the Agent Member from which it
shall 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 the
beneficial owner of the number of shares of Preferred Shares shown in the
Auction Agent's registry.
(iii) The Auction Agent shall be required to register a transfer of shares
of Preferred Shares from an Existing Holder to another Person only if (A) such
transfer is pursuant to an Auction or (B) the Auction Agent has been notified in
writing (I) in a notice substantially in the form of Exhibit E to the Broker-
Dealer Agreements by such Existing Holder, the Agent Member of such Existing
Holder or the Broker-Dealer of such Existing Holder of such transfer or (II) in
a notice substantially in the form of Exhibit F to the Broker-Dealer Agreements
by the Broker-Dealer of any Person that purchased or sold such shares of
Preferred Shares in an Auction of the failure of such shares of Preferred Shares
to be transferred as a result of such Auction. The Auction Agent is not required
to accept any such notice for an Auction unless it is received by the Auction
Agent by 3:00 P.M. on the Business Day preceding such Auction.
(d) The Auction Agent may request the Broker-Dealers, as set forth in the
Broker-Dealer Agreements, to provide the Auction Agent with a list of their
respective customers that such Broker-Dealers believe are Existing Holders of
shares of Preferred Shares. The Auction Agent shall keep confidential such
registry of Existing Holders and shall not disclose the identities of the
Existing Holders of such shares of Preferred Shares to any Person other than the
Fund and the Broker-Dealer that provided such information; and such information
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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 that
Broker-Dealers believe are Existing Holders of Preferred Shares and information
related thereto only to its officers, employees, agents or representatives who
need to know such information for the purposes of acting in accordance with this
Agreement and shall use its reasonable efforts to prevent 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
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liability for the actions of any of its officers, employees, agents or
representatives after they have left the employ of the Auction Agent.
2.3. Information Concerning Rates.
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(a) The Rate Multiple on the date of this Agreement for Preferred
Shares is %. If there is any change in the credit rating of Preferred
Shares by either of the rating agencies (or any substitute or successor rating
agency) referred to in the definition of "Rate Multiple" resulting in any change
in the Rate Multiple for Preferred Shares after the date of this Agreement, the
Fund shall notify the Auction Agent in writing of such change in the Rate
Multiple prior to 9:00 A.M. on the Auction Date succeeding such change. If the
Fund designates all or a portion of any dividend on Preferred Shares to consist
of net capital gains or other income taxable for Federal income tax purposes, it
will indicate, in its notice in the form of Exhibit I hereto to the Auction
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Agent pursuant to Section 2.6 hereof the Rate Multiple to be in effect for the
Auction Date on which the dividend rate for such dividend is to be fixed. In
determining the Maximum Rate for Preferred Shares on any Auction Date as set
forth in Section 2.3(b)(i) hereof, the Auction Agent shall be entitled to rely
on the last Rate Multiple for Preferred Shares of which it has most recently
received notice from the Fund (or, in the absence of such notice, the percentage
set forth in the first sentence of this paragraph (a)), except that if the Fund
shall have notified the Auction Agent of a Rate Multiple to be in effect for an
Auction Date in accordance with the preceding sentence, the Rate Multiple in
effect for the next succeeding Auction Date shall be, unless the Fund notifies
the Auction Agent of a change in the Rate Multiple for such succeeding Auction
Date pursuant to this Section 2.3(a), the Rate Multiple that was in effect on
the first preceding Auction Date for Preferred Shares with respect to which the
dividend, the rate for which was fixed on such Auction Date, did not include any
net capital gains or other income taxable for Federal income tax purposes.
(b) (i) On each Auction Date for Preferred Shares, the Auction Agent
shall determine the Maximum Rate. The Maximum Rate for Preferred Shares on any
Auction Date shall be:
(A) in the case of any Auction Date which is not the Auction Date
immediately prior to the first day of any proposed Special Rate Period
designated by the Fund pursuant to Section 4 of Part I of the Articles
Supplementary, the product of (1) the Reference Rate on such Auction Date
for the next Rate Period of Preferred Shares and (2) the Rate Multiple on
such Auction Date, unless the Preferred Shares has or had a Special Rate
Period and an Auction at which Sufficient Clearing Bids existed has not yet
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occurred for a Minimum Rate Period of Preferred Shares after such Special
Rate Period, in which case the higher of:
(1) the dividend rate on shares of Preferred Shares for the
then-ending Rate Period, and
(2) the product of (x) the higher of (I) the Reference Rate on
such Auction Date for the then-ending Rate Period of Preferred Shares,
if such Rate Period consists of less than four Dividend Periods, or
the Treasury Rate on such Auction Date for such Rate Period, if such
Rate Period consists of four or more Dividend Periods, and (II) the
[Reference] Rate on such Auction Date for such Special Rate Period of
Preferred Shares, if such Special Rate Period was 364 Rate Period Days
or fewer, or the Treasury Rate on such Auction Date for such Special
Rate Period, if such Special Rate Period was more than 364 Rate Period
Days and (y) the Rate Multiple on such Auction Date; or
(B) in the case of any Auction Date which is the Auction Date
immediately prior to the first day of any proposed Special Rate Period
designated by the Fund pursuant to Section 4 of Part I of the Articles
Supplementary, the product of (1) the highest of (x) the Reference Rate
on such Auction Date for the then-ending Rate Period of Preferred Shares,
if such Rate Period was 364 Rate Period Days or fewer, or the Treasury Rate
on such Auction Date for such Rate Period, if such Rate Period was more
than 364 Rate Period Days, (y) the Reference Rate on such Auction Date
for the Special Rate Period for which the Auction is being held if such
Special Rate Period was 364 Rate Period days or fewer, or the Treasury Rate
on such Auction Date for the Special Rate Period for which the Auction is
being held if such Special Rate Period was more than 364 Rate Period Days,
and (z) the [Reference] Rate on such Auction Date for Minimum Rate Periods
and (2) the Rate Multiple on such Auction Date.
Not later than 9:30 A.M. on each Auction Date, the Auction Agent shall notify
the Fund and the Broker-Dealers of the Maximum Rate so determined, the "AA"
Financial Composite Commercial Paper Rate(s), the Taxable Equivalent of the
Short-Term Municipal Bond Rate(s), the Treasury Note Rate(s) and the Treasury
▇▇▇▇ Rate(s), as the case may be, used to make such determination.
(ii) From and after a Failure to Deposit by the Fund during any Rate
Period of Preferred Shares, until such failure is cured and a late charge, if
applicable, is paid, in accordance with subparagraph e(i)(B) of Section 2 of
Part I of the Articles Supplementary, on the first day of each Rate Period of
Preferred Shares the Auction Agent shall determine the Treasury Rate for such
Rate Period if such Rate Period consists of more than 364 Rate Period Days and
the [Reference] Rate for such Rate Period if such Rate Period consists of 364
Rate Period days or fewer. Not later than 9:30 A.M. on each such first day, the
Auction Agent shall notify the Fund of the applicable Reference Rate and
Treasury Rate.
(iii) If any "AA" Financial Composite Commercial Paper Rate, Taxable
Equivalent of the Short-Term Municipal Bond Rate, Treasury Note Rate or Treasury
▇▇▇▇ Rate,
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as the case may be, is not quoted on an interest equivalent, as the case may be,
basis, the Auction Agent shall convert the quoted rate to the interest or bond
equivalent thereof as set forth in the definition of such rate in the Articles
Supplementary if the rate obtained by the Auction Agent is quoted on a discount
basis, or if such rate is quoted on a basis other than an interest or bond
equivalent or discount basis the Auction Agent shall convert the quoted rate to
an interest or bond equivalent rate after consultation with the Fund as to the
method of such conversion.
(iv) If any "AA" Financial Composite Commercial Paper Rate is to be
based on rates supplied by Commercial Paper Dealers and one or more of the
Commercial Paper Dealers shall not provide a quotation for the determination of
such "AA" Financial Composite Commercial Paper Rate, the Auction Agent shall
immediately notify the Fund so that the Fund can determine whether to select a
Substitute Commercial Paper Dealer or Substitute Commercial Paper Dealers to
provide the quotation or quotations not being supplied by any Commercial Paper
Dealer or Commercial Paper Dealers. The Fund shall promptly advise the Auction
Agent of any such selection.
(v) If any Treasury Note Rate or Treasury ▇▇▇▇ Rate is to be based on
rates supplied by U.S. Government Securities Dealers and one or more U.S.
Government Securities Dealers shall not provide a quotation for the
determination of such Treasury Rate, the Auction Agent shall immediately notify
the Fund so that the Fund can determine whether to select a Substitute U.S.
Government Securities Dealer or Substitute U.S. Government Securities Dealers to
provide the quotation or quotations not being supplied by any U.S. Government
Securities Dealer or U.S. Government Securities Dealers. The Fund shall promptly
advise the Auction Agent of any such selection.
2.4. Auction Schedule.
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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 Fund, which consent shall not be unreasonably withheld or
delayed. The Auction Agent shall give written notice of any such change to each
Broker-Dealer. Such notice shall be given prior to the close of business on the
Business Day next preceding the first Auction Date on which any such change
shall be effective.
Time Event
By 9:30 A.M. Auction Agent advises the Fund and Broker-
Dealers of the applicable Maximum Rate and the
Reference Rate(s) and Treasury Note Rate(s),
as the case may be, used in determining such
Maximum Rate as set forth in Section 2.3(b)(i)
hereof.
9:30 A.M. - 1:30 P.M. Auction Agent assembles information communicated
to it by Broker-Dealers as provided in Section
3(a) of the Auction Procedures. Submission
Deadline is 1:30 P.M.
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Time Event
Not earlier than 1:30 P.M. Auction Agent makes determinations pursuant to
Section 3(a) of the Auction Procedures.
By approximately 3:00 P.M. Auction Agent advises Fund of results of Auction
as provided in Section 3(b) of the Auction
Procedures. Submitted Bids and Submitted Sell
Orders are accepted and rejected and shares of
Preferred Shares allocated as provided in
Section 4 of the Auction Procedures. Auction
Agent gives notice of Auction results as set
forth in paragraph (a) of the Settlement
Procedures.
The Auction Agent shall follow the notification procedures set forth in
paragraph (a) of the Settlement Procedures.
2.5. Designation of Special Rate Period.
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(a) The Articles Supplementary provide that, subject to the Fund's
option to designate a Special Rate Period as referred to in paragraph (b) of
this Section 2.5, each Rate Period of Preferred Shares will be a Minimum Rate
Period (a duration of 7 days, subject to certain exceptions). Not less than 10
nor more than 20 days prior to the last day of any such Rate Period that is not
a Minimum Rate Period, (i) the Fund shall deliver to the Auction Agent a notice
of the Auction Date of the next succeeding Auction for Preferred Shares in the
form of Exhibit C hereto and (ii) the Auction Agent shall deliver such notice by
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first-class mail, postage prepaid, to the Broker-Dealers for Preferred Shares as
promptly as practicable after its receipt of such notice from the Fund.
(b) Pursuant to the Articles Supplementary, the Fund may, at its
option, designate a Special Rate Period for Preferred Shares in the manner
described in Section 4 of Part I of the Articles Supplementary.
(i) If the Board of Directors proposes to designate any succeeding
Subsequent Rate Period of Preferred Shares as a Special Rate Period, (A)
the Fund shall deliver to the Auction Agent a notice of such proposed
Special Rate Period in the form of Exhibit D hereto not less than 20 nor
more than 30 days prior to the first day of such proposed Special Rate
Period and (B) the Auction Agent on behalf of the Fund shall deliver such
notice by first-class mail, postage prepaid, to each Existing Holder of
shares of Preferred Shares at the address specified by such Existing Holder
and to the Broker-Dealers for Preferred Shares as promptly as practicable
after its receipt of such notice from the Fund.
(ii) If the Board of Directors determines to designate such succeeding
Subsequent Rate Period as a Special Rate Period, (A) the Fund shall deliver
to the Auction Agent a notice of such determination in the form of
Exhibit E hereto not later
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than 11:00 A.M. on the second Business Day next preceding the first day of
such proposed Special Rate Period and (B) the Auction Agent shall deliver
such notice to the Broker-Dealers for Preferred Shares not later than 3:00
P.M. on such second Business Day.
(iii) If the Fund shall deliver to the Auction Agent a notice stating
that the Fund has determined not to exercise its option to designate such
succeeding Subsequent Rate Period as a Special Rate Period with respect to
which it has delivered a notice in the form of Exhibit E hereto not later
than 11:00 A.M. on the second Business Day next preceding the first day of
such proposed Special Rate Period, or shall fail to timely deliver either
such notice or a notice in the form of Exhibit E hereto, the Auction Agent
shall deliver a notice in the form of Exhibit F hereto to the
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Broker-Dealers for Preferred Shares not later than 3:00 P.M. on such second
Business Day.
Such change in the length of any Rate Period shall not occur if, among other
things, (a) an Auction shall not be held on such Auction Date for any reason or
(b) an Auction shall be held but Sufficient Clearing Bids shall not exist in
such Auction.
2.6. Failure to Deposit.
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(a) If:
(i) any Failure to Deposit shall have occurred with respect to shares
of Preferred Shares during any Rate Period thereof (other than any Special
Rate Period consisting of four or more Dividend Periods or any Rate Period
succeeding any Special Rate Period consisting of four or more Dividend
Periods during which a Failure to Deposit occurred that has not been
cured); and
(ii) prior to 12:00 Noon on the third Business Day next succeeding the
date on which such Failure to Deposit occurred, such Failure to Deposit
shall have been cured in accordance with the next succeeding sentence and
the Fund shall have paid to the Auction Agent a late charge equal to the
sum of (A) if such Failure to Deposit consisted of the failure timely to
pay to the Auction Agent the full amount of dividends with respect to any
Dividend Period on the shares of Preferred Shares, an amount computed by
multiplying (1) 225% of the "AA" Financial Composite Commercial Paper Rate
for the Rate Period during which such Failure to Deposit occurs on the
Dividend Payment Date for such Dividend Period by (2) a fraction, the
numerator of which shall be the number of days for which such Failure to
Deposit has not been cured in accordance with the next sentence (including
the day such Failure to Deposit occurs and excluding the day such Failure
to Deposit is cured) and the denominator of which shall be 360, and
applying the rate obtained against the aggregate liquidation preference of
the outstanding shares of Preferred Shares and (B) if such Failure to
Deposit consisted of the failure timely to pay to the Auction Agent the
cash Redemption Price of the shares of Preferred Shares, if any, for which
Notice of Redemption has been given by the Fund pursuant to paragraph (b)
of Section 3 of Part I of the Articles Supplementary, an amount computed by
multiplying (x) % of the Reference Rate for the Rate Period during
which such
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Failure to Deposit occurs on the redemption date by (y) a fraction, the
numerator of which shall be the number of days for which such Failure to
Deposit is not cured in accordance with the next succeeding sentence
(including the day such Failure to Deposit occurs and excluding the day
such Failure to Deposit is cured) and the denominator of which shall be
360, and applying the rate obtained against the aggregate liquidation
preference of the outstanding shares of Preferred Shares to be redeemed,
then the Auction Agent shall deliver a notice in the form of Exhibit G hereto
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by first-class mail, postage prepaid, to the Broker-Dealers for Preferred Shares
not later than one Business Day after its receipt of the payment from the Fund
curing such Failure to Deposit and such late charge. A Failure to Deposit with
respect to Preferred Shares shall have been cured (if such Failure to Deposit is
not solely due to the willful failure of the Fund to make the required payment
to the Auction Agent) with respect to any Rate Period thereof if, not later than
12:00 Noon on the fourth Business Day preceding any Auction Date therefor the
Fund shall have paid to the Auction Agent (A) all accumulated and unpaid
dividends on the shares of Preferred Shares and (B) without duplication, the
Redemption Price for the shares of Preferred Shares, if any, for which Notice of
Redemption has been given by the Fund pursuant to paragraph (b) of Section 3 of
Part I of the Articles Supplementary.
(b) If:
(i) any Failure to Deposit shall have occurred with respect to shares
of Preferred Shares during a Rate Period thereof (other than any Special
Rate Period consisting of more than 364 Rate Period Days or any Rate Period
succeeding any Special Rate Period consisting of more than 364 Rate Period
days during which a Failure to Deposit occurred that has not been cured),
and, prior to 12:00 Noon on the third Business Day next succeeding the date
on which such Failure to Deposit occurred, such Failure to Deposit shall
not have been cured within the meaning of the last sentence of Section
2.6(a) hereof and the Fund shall not have paid to the Auction Agent the
late charge described in such Section 2.6(a), but such Failure to Deposit
shall subsequently be so cured; or
(ii) any Failure to Deposit shall have occurred with respect to shares
of Preferred Shares during a Special Rate Period consisting of four or more
Dividend Periods, or during any Rate Period succeeding any Special Rate
Period consisting of four or more Dividend Periods during which a Failure
to Deposit occurred that has not been cured, and such Failure to Deposit
shall subsequently have been cured within the meaning of the last sentence
of Section 2.6(a) hereof,
then the Auction Agent shall deliver a notice in the form of Exhibit H hereto
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to the Broker-Dealers for Preferred Shares not later than one Business Day after
the receipt of the payment from the Fund curing such Failure to Deposit.
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2.7. Allocation of Taxable Income.
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The Fund shall, in the case of a Minimum Rate Period or a Special Rate
Period of 28 Rate Period Days or fewer, and may, in the case of any other
Special Rate Period, designate all or a portion of any dividend on Preferred
Shares to consist of net capital gains or other income taxable for Federal
income tax purposes by delivering to the Auction Agent a notice in the form of
Exhibit I hereto of such designation before the beginning of such Rate
Period.
2.8. Broker-Dealers.
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(a) Not later than 5:00 P.M. on the Business Day immediately
precedings each Dividend Payment Date for Preferred Shares, the Fund shall
pay to the Auction Agent an amount in cash equal to the aggregate fees payable
to the Broker-Dealers for Preferred Shares pursuant to Section 2.8 of the
Broker-Dealer Agreements for Preferred Shares. The Auction Agent shall advise
the Fund of the amount referred to in the preceding sentence in respect of such
Auction not later than 4:00 P.M. on the Business Day preceding such Dividend
Payment Date. The Auction Agent shall apply such moneys as set forth in Section
2.8 of each such Broker-Dealer Agreement. To the extent that any such moneys
are not payable to a Broker-Dealer because Sufficient Clearing Bids did not
exist in the relevant Auction and the Preferred Shares therefore continue to
be held despite being subject to a Submitted Sell Order, the Auction Agent
shall repay such money to the Fund.
(b) The Auction Agent shall terminate any Broker-Dealer Agreement as
set forth therein if so directed by the Fund, provided that at least one
Broker-Dealer Agreement would be in effect after such termination.
(c) The Auction Agent shall from time to time enter into such
Broker-Dealer Agreements with one or more Broker-Dealers as the Fund shall
request.
(d) The Auction Agent shall maintain and update from time to time a
list of Broker-Dealers.
2.9. Ownership of Shares of Preferred Shares.
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The Fund shall notify the Auction Agent if the Fund or any affiliate
(as such term is defined in the Investment Company Act of 1940, as amended) of
the Fund acquires any shares of Preferred Shares, except as set forth in the
next sentence. A Broker-Dealer that is an affiliate of the Fund may submit
Orders in Auctions, but only if such Orders are not for its own account. For
purposes of this section 2.9, a Broker-Dealer shall not be deemed to be an
affiliate solely because one or more of the directors or executive officers of
the Broker-Dealer or of any Person controlled by, in control of or under common
control with such Broker-Dealer is a director of the Fund. The Auction Agent
shall have no duty or liability with respect to enforcement of this Section
2.9.
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2.10. Access to and Maintenance of Auction Records.
--------------------------------------------
The Auction Agent shall, upon the written request of the Fund, afford
to the Fund and its agents, independent accountants and legal counsel access at
reasonable times during normal business hours to all books, records, documents
and other information concerning the Auction Agent's services hereunder. The
Auction Agent shall maintain such records for a period of two years after the
Auction to which such services relate, unless requested by the Fund to maintain
such records for a longer period of time, and such records shall, in reasonable
detail, accurately and fairly reflect the actions taken by the Auction Agent
hereunder. At the end of such period, if so requested in writing, the Auction
Agent shall deliver such records to the Fund.
3. The Auction Agent as Preferred Shares Paying Agent.
--------------------------------------------------
3.1. Fund to Provide for Dividends and Redemptions.
---------------------------------------------
(a) Not later than 12:00 Noon on the Business Day immediately
preceding each Dividend Payment Date with respect to which dividends on the
Preferred Shares have been declared, the Fund shall deposit or cause to be
deposited with the Auction Agent sufficient funds (available on such Dividend
Payment Date in New York City) for the payment of such dividends. The Fund
hereby irrevocably instructs the Auction Agent to apply such funds deposited
with the Auction Agent to the payment of such dividends on such Dividend Payment
Date. The Fund may direct, in writing, the Auction Agent to invest any available
funds in Short-Term Money Market Instruments; provided that the proceeds of any
such investments will be available in New York City at the opening of business
on such Dividend Payment Date.
(b) If the Fund shall give a Notice of Redemption, then, not later
than 12:00 Noon of the Business Day immediately preceding the date fixed for
redemption, the Fund shall deposit with the Auction Agent sufficient funds
(available on such redemption date in New York City) to redeem the Preferred
Shares called for redemption in such Notice of Redemption and hereby irrevocably
instructs the Auction Agent to apply such funds and, if applicable, the income
and proceeds received therefrom, to the payment of the redemption price for such
Preferred Shares upon surrender of the certificate or certificates therefor. The
Fund may direct, in writing, the Auction Agent to invest any available funds in
Short-Term Money Market Instruments; provided that the proceeds of any such
--------
investments will be available in New York City at the opening of business on the
redemption date.
(c) The Auction Agent shall not be liable or responsible for any loss,
in whole or in part, incurred or resulting from any investments made pursuant to
paragraph (a) or (b) of this Section 3.1, such investments being solely for the
account of and at the risk of the Fund. The Auction Agent shall also not be
liable to the extent that investments made by the Auction Agent at the direction
of the Fund pursuant to clause (a) or (b) of this Section 3.1 do not constitute
Short-Term Money Market Instruments.
-12-
(d) If pursuant to paragraph (a) or (b) of this Section 3.1 the Fund
directs the Auction Agent to invest in Short-Term Money Market Instruments and
the Auction Agent receives income on such investments, then the Auction Agent
shall (to the extent that such income is not required to pay dividends or the
redemption price of shares to be redeemed, as the case may be), upon the request
of the Fund, transmit such income to the Fund.
3.2. Disbursing Dividend and Redemption Price.
----------------------------------------
Subject to receipt of the requisite funds, the Auction Agent shall pay
to the Holders of the Preferred Shares (i) on each Dividend Payment Date for the
Preferred Shares, dividends (to the extent that the Fund has deposited with the
Auction Agent, pursuant to Section 3.1(a) hereof, funds for the payment
thereof), on such Preferred Shares, and (ii) on any date fixed for redemption of
Preferred Shares, the redemption price for any Preferred Shares called for
redemption upon presentation and surrender of the certificate or certificates
evidencing Preferred Shares held by such Holders and called for redemption. The
amount of dividends for any Rate Period or portion thereof to be paid by the
Auction Agent to the Holders will be determined by the Fund as set forth in
Section 2(c) of Part I of the Articles Supplementary. The redemption price to be
paid by the Auction Agent to the Holders will be determined by the Fund as set
forth in Section 3(a) of Part I of the Articles Supplementary. The Fund shall
deliver to the Auction Agent any Notice of Redemption required by Section 3(b)
of Part I of the Articles Supplementary when mailed by the Fund to the Holders
of the shares to be redeemed. Such notice shall contain the information required
by such Section 3(b) to be stated in the Notice of Redemption. The Auction Agent
shall have no duty or responsibility in connection with any Notice of Redemption
and shall have no duty or responsibility to determine the redemption price and
may rely on the amount thereof set forth in such notice.
3.3. Preferred Shares Basic Maintenance Report.
-----------------------------------------
On or before 5:00 P.M., New York City time, on the third Business Day after
a Valuation Date on which the Fund fails to satisfy the Preferred Shares Basic
Maintenance Amount, and on the third Business Day after the Preferred Shares
Basic Maintenance Cure Date with respect to such Valuation Date, the Fund shall
complete and deliver to the Auction Agent (if either Fitch or ▇▇▇▇▇'▇ is then
rating the shares of Preferred Shares) a Preferred Shares Basic Maintenance
Report as of the date of such failure or such Preferred Shares Basic Maintenance
Cure Date, as the case may be, which will be deemed to have been delivered to
the Auction Agent if the Auction Agent receives a copy or telecopy, telex or
other electronic transcription thereof and on the same day the Fund mails to the
Auction Agent for delivery on the next Business Day the full Preferred Shares
Basic Maintenance Report.
-13-
3.4. [Reserved.]
3.5. Notice of Special Meeting of Holders of the Preferred Shares of the
-------------------------------------------------------------------
Fund.
----
(a) If an event described in Section 5(c) of part I of the Articles
Supplementary occurs resulting in the commencement of a Voting Period, then the
Auction Agent shall, upon receipt from the Fund of a notice (the "Notice") of a
special meeting of the Holders of the Preferred Shares (the "Special Meeting"),
mail the Notice to all Holders of Preferred Shares who were Holders of record at
the close of business on the fifth Business Day preceding the date of mailing of
the Notice to such Holders (the "Record Date"). The Auction Agent shall insert
the Record Date, the date of the Special Meeting and the time of day of such
meeting, as specified by the Fund, in the Notice.
(b) If at any time after the Auction Agent shall have mailed the
Notice but before the Special Meeting shall have been held, all accumulated and
unpaid dividends
-14-
(including Additional Distributions, if any) on all then outstanding Preferred
Shares including the accumulated and unpaid dividends for the current Rate
Period for the Preferred Shares shall have been paid or declared and a sum
sufficient for the payment of such dividends deposited with the Auction Agent,
the Auction Agent shall, upon receipt from the Fund of a notice of cancellation
of such Special Meeting, mail such notice as soon as practicable to all Holders
of Preferred Shares who were Holders of record at the close of business on the
Record Date.
(c) The Fund shall provide a temporary chairman for any Special
Meeting. The Auction Agent shall have no obligations in connection with such
meeting, except with respect to the mailing of the Notice pursuant to this
Agreement.
4. The Auction Agent as Transfer Agent and Registrar.
-------------------------------------------------
4.1. Original Issue of Stock Certificates.
------------------------------------
Upon the Date of Original Issue of Preferred Shares, one certificate
representing all of the shares of Preferred Shares issued on such date shall be
issued by the Fund and, at the request of the Fund, registered in the name of
Cede & Co. and countersigned by the Auction Agent.
4.2. Registration of Transfer of Shares.
----------------------------------
Shares of Preferred Shares shall be registered solely in the name of
the Securities Depository or its nominee. If the Securities Depository shall
give notice of its intention to resign as such and if the Fund shall not have
selected a substitute Securities Depository, then upon such resignation, the
Preferred Shares shall be registered for transfer or exchange, and a new
certificate or certificates shall be issued in the name or names of the
designated transferee or transferees upon surrender of the old certificate or
certificates in form deemed by the Auction Agent properly endorsed for transfer
with all necessary endorsers' signatures guaranteed, in such manner and form as
the Auction Agent may require, by a guarantor reasonably believed by the Auction
Agent to be responsible, accompanied by such assurances as the Auction Agent
shall deem necessary or appropriate to evidence the genuineness and
effectiveness of each necessary endorsement and satisfactory evidence of
compliance with all applicable laws relating to the collection of taxes or funds
necessary for the payment of such taxes.
4.3. [Reserved.]
-15-
4.4. [Reserved]
----------
4.5. [Reserved]
----------
4.6. Stock or Record Books.
---------------------
For so long as the Auction Agent is acting as the transfer agent for
Preferred Shares pursuant to this Agreement, it shall maintain a stock or record
book containing a list of the Holders of the shares of Preferred Shares who are
Broker-Dealers. In case of any request or demand for the inspection of the stock
books of the Fund or any other books in the possession of the Auction Agent, the
Auction Agent will notify the Fund and secure instructions as to permitting or
refusing such inspection. The Auction Agent reserves the right, however, to
exhibit the stock books or other books to any Person in case it is advised by
its counsel that its failure to do so would be unlawful.
4.7. Return of Funds.
---------------
Any funds deposited with the Auction Agent hereunder by the Fund for
any reason, including but not limited to the redemption of shares of Preferred
Shares, that remain unpaid after ninety days shall be repaid to the Fund upon
the written request of the Fund, together with interest, if any, received
thereon.
5. Representations and Warranties of the Fund.
------------------------------------------
The Fund represents and warrants to the Auction Agent that:
-16-
(a) the Fund is a duly incorporated and validly existing limited
liability company in good standing under the laws of the State of Maryland and
has full corporate power to execute and deliver this Agreement and to authorize,
create and issue the shares of Preferred Shares and the shares of Preferred
Shares when issued, will be duly authorized, validly issued, fully paid and
nonassessable;
(b) this Agreement has been duly and validly authorized, executed and
delivered by the Fund and, when executed and delivered by the other parties
hereto, will constitute the legal, valid, binding and enforceable obligation
of the Fund, subject, as to enforceability, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equitable principles;
(c) the form of the certificate evidencing the shares of Preferred
Shares complies with all applicable laws of the State of Maryland;
(d) when issued, the shares of Preferred Shares will have been duly
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 have been required in connection with the issuance of the
shares of Preferred Shares (except such as may be required for compliance with
the state securities or blue sky laws of various jurisdictions);
(e) the execution and delivery of this Agreement and the issuance and
delivery of the shares of Preferred Shares do not and will not conflict with,
violate or result in a breach of, the terms, conditions or provisions of, or
constitute a default under, the Articles of Incorporation (as amended by one or
more Articles Supplementary) or the By Laws of the Fund, any law or regulation,
any order or decree of any court or public authority having jurisdiction, or any
mortgage, indenture, contract, agreement or undertaking to which the Fund is a
party or by which it is bound, the effect of which conflict, violation, default
or breach would be material to the Fund and its subsidiaries, taken as a whole;
and
(f) no taxes are payable upon or in respect of the execution of this
Agreement or the issuance of the shares of Preferred Shares.
6. The Auction Agent.
-----------------
6.1. Duties and Responsibilities.
---------------------------
(a) The Auction Agent is acting solely as agent for the Fund hereunder
and owes no fiduciary duties to any Person, other than the Fund, 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
-17-
for any error of judgment made in good faith unless the Auction Agent shall have
been negligent in ascertaining the pertinent facts.
6.2. Rights of the Auction Agent.
---------------------------
(a) The Auction Agent may rely and shall be protected in acting or
refraining from acting upon any communication authorized hereby and upon any
written instruction, notice, request, direction, consent, report, certificate,
share certificate or other instrument, paper or document believed in good faith
by it to be genuine. The Auction Agent shall not be liable for acting upon any
telephone communication authorized hereby which the Auction Agent believes in
good faith to have been given by the Fund or by a Broker-Dealer. The Auction
Agent may record telephone communications with the Fund or with the
Broker-Dealers or both.
(b) The Auction Agent may consult with counsel of its 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.
6.3. Auction Agent's Disclaimer.
--------------------------
The Auction Agent makes no representation as to the validity or
adequacy of this Agreement, the Broker-Dealer Agreements or the shares of
Preferred Shares, except that the Auction Agent hereby represents that the
Agreement has been duly authorized, executed and delivered by the Auction Agent
and constitutes the legal and binding obligation of the Auction Agent,
enforceable in accordance with its terms.
6.4. Compensation, Expenses and Indemnification.
------------------------------------------
(a) The Fund shall pay the Auction Agent from time to time reasonable
compensation for all services rendered by it under this Agreement and the
Broker-Dealer Agreements.
(b) The Fund shall reimburse the Auction Agent upon its request for
all reasonable out-of-pocket expenses, disbursements and advances incurred or
made by the Auction Agent in accordance with any provision of this Agreement and
the Broker-Dealer Agreements (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any expense or
disbursement attributable to its negligence or bad faith.
(c) The Fund shall indemnify the Auction Agent for and hold it
harmless against any loss, liability or expense incurred without negligence or
bad faith on its part, arising
-18-
out of or in connection with its agency under this Agreement and the
Broker-Dealer Agreements, including the costs and expenses of defending itself
against any such claim or liability in connection with its exercise or
performance of any of its duties hereunder and thereunder for which it is
entitled to indemnification hereunder or thereunder.
7. Miscellaneous.
-------------
7.1. Term of Agreement.
-----------------
(a) The term of this Agreement is unlimited unless it shall be
terminated as provided in this Section 7.1. The Fund may terminate this
Agreement at any time by so notifying the Auction Agent; provided that the Fund
--------
has entered into an agreement in substantially the form of this Agreement with a
successor Auction Agent or no shares of Preferred Shares remain outstanding. The
Auction Agent may terminate this Agreement upon written notice to the Fund on
the date specified in such notice, which termination shall be no earlier than 45
days after the date of delivery of such notice.
(b) Except as otherwise provided in this paragraph (b), the respective
rights and duties of the Fund and the Auction Agent under this Agreement with
respect to Preferred Shares shall cease upon termination of this Agreement. The
Fund's representations, warranties, covenants and obligations to the Auction
Agent under Sections 5 and 6.4 hereof shall survive the termination of this
Agreement. Upon termination of this Agreement, the Broker-Dealer Agreements
shall automatically terminate and the duties of the Auction Agent under each of
the Broker-Dealer Agreements shall cease and at the Fund's request, the Auction
Agent shall promptly deliver to the Fund copies of all books and records
maintained by it with respect to Preferred Shares in connection with its duties
hereunder.
7.2. Communications.
--------------
Except for (i) communications authorized to be by telephone pursuant
to this Agreement or the Auction procedures and (ii) communications in
connection with Auctions (other than those expressly required to be in writing),
all notices, requests and other communications to any party hereunder shall be
in writing (including telecopy or similar writing) and shall be given to such
party, addressed to it, at its address or telecopy number set forth below:
If to the Fund, Intermediate Muni Fund, Inc.
addressed: c/o ▇▇▇▇▇ ▇▇▇▇▇▇ Fund Management, LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Telecopier No.:
Telephone No.:
-19-
If to the Auction Bankers Trust Company,
Agent, addressed: as Auction Agent
▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
New York, New York
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopier No.: ▇▇▇ ▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇ ▇▇▇-▇▇▇▇
or such other address or telecopy number as such party may hereafter specify for
such purpose by notice to the other party. Each such notice, request or
communication shall be effective when delivered at the address specified herein.
communications shall be given on behalf of the Fund by a Fund 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 implied,
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 Fund, 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 the parties hereto.
(b) Failure of either party hereto to exercise any right or remedy
hereunder in the event of a breach hereof by the other party shall not
constitute a waiver of any such right or remedy with respect to any subsequent
breach.
7.6. Successor and Assigns.
---------------------
This Agreement shall be binding upon, inure to the benefit of, and be
enforceable by, the respective successors and assigns of each of the Fund and
the Auction Agent.
-20-
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 New York without giving effect to the choice of law provisions
thereof.
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.
INTERMEDIATE MUNI FUND, INC.
By:
--------------------------------
Title:
BANKERS TRUST COMPANY
By:
--------------------------------
Title:
-21-
EXHIBIT A
[Form of Broker-Dealer Agreement]
EXHIBIT B
[Form of Settlement Procedures]
SETTLEMENT PROCEDURES
Capitalized terms used herein have the respective meanings specified
in the forepart of this Prospectus or the Glossary, as the case may be.
(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 an Existing Holder or Potential Holder of:
(i) the Applicable Rate fixed for the next succeeding Rate Period;
(ii) whether Sufficient Clearing Bids existed for the determination of
the Applicable Rate;
(iii) if such Broker-Dealer submitted a Bid or a Sell order on behalf
of an Existing Holder, whether such Bid or Sell Order was accepted or
rejected, in whole or in part, and the number of shares, if any, of
Preferred Shares then outstanding to be sold by such Existing Holder;
(iv) if such Broker-Dealer submitted a Bid on behalf of a Potential
Holder, whether such Bid was accepted or rejected, in whole or in part, and
the number of shares, if any, of Preferred Shares to be purchased by such
Potential Holder;
(v) if the aggregate number of shares of Preferred Shares to be sold
by all Existing Holders on whose behalf such Broker-Dealer submitted Bids
or Sell orders exceeds the aggregate number of shares 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 other Broker-Dealers (and
the Agent member, if any, of each such other Broker-Dealer) and the number
of shares of Preferred Shares to be (x) purchased from one or more Existing
Holders on whose behalf such other Broker-Dealers submitted Bids or Sell
Orders or (y) sold to one or more Potential Holders on whose behalf such
other Broker-Dealers submitted Bids; and
(vi) the scheduled Auction Date of the next succeeding Auction.
(b) On each Auction Date, each Broker-Dealer that submitted an Order
on behalf of any Existing Holder or Potential Holder shall:
(i) advise each Existing Holder and Potential Holder on whose behalf
such Broker-Dealer submitted a Bid or Sell Order whether such Bid or Sell
Order was accepted or rejected, in whole or in part;
B-1
(ii) instruct each Potential Holder on whose behalf such Broker-Dealer
submitted a Bid that was accepted, in whole or in part, to instruct such
Bidder'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 shares of Preferred Shares to be purchased pursuant to such Bid
against receipt of such shares;
(iii) instruct each Existing Holder on whose behalf such Broker-Dealer
submitted a Bid that was accepted, in whole or in part, or a Sell Order
that was accepted, in whole or in part, to instruct such Bidder's Agent
Member to deliver to such Broker-Dealer (or its Agent Member) through the
Securities Depository the number of shares of Preferred Shares to be sold
pursuant to such Bid or Sell Order against payment therefor;
(iv) advise each Existing Holder on whose behalf such Broker-Dealer
submitted an Order and each Potential Holder on whose behalf such
Broker-Dealer submitted a Bid of the Applicable Rate for the next
succeeding Rate Period;
(v) advise each Existing Holder on whose behalf such Broker-Dealer
submitted an Order of the Auction Date of the next succeeding Auction; and
(vi) 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
of the next succeeding Auction.
(c) on the basis of the information provided to it pursuant to
paragraph (a) above, each Broker-Dealer that submitted a Bid or Sell order shall
allocate any funds received by it pursuant to paragraph (b)(ii) above, and any
shares of Preferred Shares received by it pursuant to paragraph (b)(iii) 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 or Sell orders, and any Broker-Dealers identified to it by the
Auction Agent pursuant to paragraph (a)(v) above.
(d) On the Business Day after the Auction Date, the securities
Depository shall execute the transactions described above, debiting and
crediting the accounts of the respective Agent Members as necessary to effect
the purchases and sale of shares of Preferred Shares as determined in the
Auction for such series.
(e) Any delivery or nondelivery 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 nondelivery in accordance with the provisions of
the Auction Agency Agreement and the Broker-Dealer Agreement.
B-2
EXHIBIT C
---------
INTERMEDIATE MUNI FUND, INC.
NOTICE OF AUCTION DATE FOR
MUNICIPAL AUCTION RATE CUMULATIVE PREFERRED STOCK, SERIES M
("Preferred Shares")
NOTICE IS HEREBY GIVEN that the Auction Date of the next Auction for the
Fund's Preferred Shares is scheduled to be ___________, 20__ and the next
Dividend Payment Date for the Fund's Preferred Shares will be __________, 20__.
[A Failure to Deposit in respect of the Preferred Shares currently exists.
If such Failure to Deposit is not cured prior to 12 Noon on the fourth Business
Day prior to the next scheduled Auction Date of the Preferred Shares, the next
Auction will not be held. Notice of the next Auction for the Preferred Shares
will be delivered when such Failure to Deposit is cured./1/]
INTERMEDIATE MUNI FUND, INC.
------------------------------------
/1/ Include this language if a Failure to Deposit exists.
C-1
EXHIBIT D
---------
INTERMEDIATE MUNI FUND, INC.
NOTICE OF PROPOSED CHANGE OF
LENGTH OF RATE PERIOD OF
MUNICIPAL AUCTION RATE CUMULATIVE PREFERRED STOCK, SERIES M
("Preferred Shares")
NOTICE IS HEREBY GIVEN that INTERMEDIATE MUNI FUND, INC. (the "Fund") may
exercise its option to designate the Rate Period of its Preferred Shares
commencing [the first day of the Special Rate Period] as a Special Rate Period.
By 11:00 A.M. on the second Business Day preceding the first day of such
proposed Special Rate Period, the Fund will notify [the Auction Agent] of either
(a) its determination to exercise such option, designating the length of such
Special Rate Period for Preferred Shares or (b) its determination not to
exercise such option.
INTERMEDIATE MUNI FUND, INC.
Dated: ___________, 20__
D-1
EXHIBIT E
---------
INTERMEDIATE MUNI FUND, INC.
NOTICE OF CHANGE OF LENGTH OF RATE PERIOD OF
MUNICIPAL AUCTION RATE CUMULATIVE PREFERRED STOCK, SERIES M
("Preferred Shares")
NOTICE IS HEREBY GIVEN that INTERMEDIATE MUNI FUND, INC. (the "Fund") has
determined to designate the Rate Period of its Preferred Shares commencing on
[the first day of the Special Rate Period] as a Special Rate Period.
The Special Rate Period will be ______________ [days] [year(s)].
The Auction Date for the Special Rate Period is (the Business Day next
preceding the first day of such Special Rate Period).
As a result of the Special Rate Period designation, the amount of dividends
payable on Preferred Shares during the special Rate Period will be based on a
360-day year.
The Special Rate Period shall not commence if (a) on such Auction Date
Sufficient Clearing Bids shall not exist or (b) if a Failure to Deposit shall
have occurred prior to the first day thereof with respect to shares of Preferred
Shares.
The scheduled Dividend Payment Dates for Preferred Shares during such
Special Rate Period will be ________________________.
INTERMEDIATE MUNI FUND, INC.
Dated: ___________, 20__
E-1
EXHIBIT F
---------
INTERMEDIATE MUNI FUND, INC.
NOTICE OF DETERMINATION NOT TO CHANGE
LENGTH OF RATE PERIOD OF
MUNICIPAL AUCTION RATE CUMULATIVE PREFERRED STOCK, SERIES M
("Preferred Shares")
NOTICE IS HEREBY GIVEN that INTERMEDIATE MUNI FUND, INC. (the "Fund") has
determined not to exercise its option to designate a Special Rate Period of its
Preferred Shares and the next succeeding Rate Period of Preferred Shares will be
a Minimum Rate Period of _________ Rate Period Days.
INTERMEDIATE MUNI FUND, INC.
Dated: __________, 20__
F-1
EXHIBIT G
---------
INTERMEDIATE MUNI FUND, INC.
NOTICE OF CURE OF
FAILURE TO DEPOSIT ON
MUNICIPAL AUCTION RATE CUMULATIVE PREFERRED STOCK, SERIES M
("Preferred Shares")
NOTICE IS HEREBY GIVEN that INTERMEDIATE MUNI FUND, INC. (the "Fund") has
cured its Failure to Deposit with respect to its Preferred Shares. The dividend
rate on the shares of Preferred Shares for the current Dividend Period is _ %
per annum, the Dividend Payment Date for the current Dividend Period is
scheduled to be __________ 20_ and the next Auction Date is scheduled to be
__________ 20__.
INTERMEDIATE MUNI FUND, INC.
Dated: ___________, 20
G-1
EXHIBIT H
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INTERMEDIATE MUNI FUND, INC.
NOTICE OF CURE OF
FAILURE TO DEPOSIT ON
MUNICIPAL AUCTION RATE CUMULATIVE PREFERRED STOCK, SERIES M
("Preferred Shares")
NOTICE IS HEREBY GIVEN that INTERMEDIATE MUNI FUND, INC. (the "Fund") has
cured its Failure to Deposit with respect to its Preferred Shares. The next
Auction Date for the Preferred Shares is scheduled to be on ______________ 20__.
INTERMEDIATE MUNI FUND, INC.
Dated: ________________, 20__
H-1
EXHIBIT I
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INTERMEDIATE MUNI FUND, INC.
NOTICE OF [CAPITAL GAINS] [AND] [TAXABLE ORDINARY INCOME](1) DIVIDEND
FOR MUNICIPAL AUCTION RATE CUMULATIVE PREFERRED STOCK, SERIES M
("Preferred Shares")
NOTICE IS HEREBY GIVEN that the amount of the dividend payable on
________________, 20____ for Preferred Shares will be determined by the Auction
to be held on _______________, 20___. Up to [$ A](2)[$ B ](3) per share of the
dividend payable on such date as determined by such Auction will consist of
[capital gains](2) [ordinary income taxable for Federal income tax purposes](3).
If the dividend amount payable on such date as determined by such Auction is
less than [$ A ](2) [$ B ](3) per share, the entire amount of the dividend will
consist of [capital gains](2) [ordinary income taxable for Federal income tax
purposes](3). [To the extent such dividend amount exceeds [$ A ] per share, any
excess up to [$ B ] per share will consist of ordinary income taxable for
Federal income tax purposes.](4) Accordingly, the aforementioned composition of
the dividend payable on _______________, 20___ should be considered in
determining Orders to be submitted with respect to the Auction to be held on
________________, 20__. The Rate Multiple in effect for such Auction will be
____%.
INTERMEDIATE MUNI FUND, INC.
I-1