Exhibit 99.(k)(4)
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AUCTION AGENT AGREEMENT
between
THE MASSACHUSETTS HEALTH & EDUCATION TAX-EXEMPT TRUST
and
DEUTSCHE BANK TRUST COMPANY AMERICAS
Dated as of August __, 2005
Relating to
AUCTION PREFERRED SHARES
("APS"),
Series B
of
THE MASSACHUSETTS HEALTH & EDUCATION TAX-EXEMPT TRUST
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THIS AUCTION AGENT AGREEMENT, dated as of August __, 2005, is between THE
MASSACHUSETTS HEALTH & EDUCATION TAX-EXEMPT TRUST, a Massachusetts business
trust (the "Company"), and DEUTSCHE BANK TRUST COMPANY AMERICAS, a New York
banking corporation ("Deutsche Bank").
The Company proposes to duly authorize and issue 200 shares of Auction
Preferred Shares, Series B (the "APS") with a par value of $.01 per share and a
liquidation preference of $50,000 per share plus an amount equal to accumulated
but unpaid dividends (whether or not earned or declared), pursuant to the
Company's Certificate of Designation (as defined below). A separate Auction (as
defined below) will be conducted for the APS and each series of Other APS (as
defined below). The Company desires that Deutsche Bank perform certain duties as
agent in connection with each Auction of APS (in such capacity, the "Auction
Agent"), and as the transfer agent, registrar, dividend disbursing agent and
redemption agent with respect to the APS (in such capacity, the "Paying Agent"),
upon the terms and conditions of this Agreement, and the Company hereby appoints
Deutsche Bank as said Auction Agent and Paying Agent in accordance with those
terms and conditions (hereinafter generally referred to as the "Auction Agent,"
except in Sections 3 and 4 below).
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the Company and the Auction Agent agree as follows:
I. DEFINITIONS AND RULES OF CONSTRUCTION.
1.1. Terms Defined by Reference to Certificate of Designation.
Capitalized terms not defined herein shall have the respective meanings
specified in the Certificate of Designation.
1.2. Terms Defined Herein.
As used herein and in the Settlement Procedures (as defined below), the
following terms shall have the following meanings, unless the context otherwise
requires:
(a) "Affiliate" shall mean any Person, other ▇▇▇▇ ▇▇▇▇▇▇▇ Lynch,
Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, made known to the Auction Agent
to be controlled by, in control of, or under common control with,
the Company or its successors.
(b) "Agent Member" of any Person shall mean such Person's agent
member of the Securities Depository that will act on behalf of a
Bidder.
(c) "Auction" shall have the meaning specified in Section 2.1
hereof.
(d) "Auction Agent Acceptance Fee" means an acceptance fee as set
forth in a written agreement between the Auction Agent and the
Company.
(e) "Auction Agent Fee" means the fees, other than the Auction Agent
Acceptance Fee, set forth in a written agreement signed by the
Auction Agent and the Company.
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(f) "Auction Procedures" shall mean the Auction Procedures that are
set forth in Part II of the Certificate of Designation.
(g) "Authorized Officer" shall mean each Vice President, Assistant
Vice President, and Associate of the Auction Agent assigned to its
Trust and Securities Services, and every other officer or employee
of the Auction Agent designated as an "Authorized Officer" for
purposes hereof in a written communication to the Company.
(h) "Broker-Dealer Agreement" shall mean each agreement between the
Auction Agent and a Broker-Dealer substantially in the form attached
hereto as Exhibit A.
(i) "Certificate of Designation" shall mean the Certificate of Vote
of the Company, establishing the powers, preferences and rights of
the APS, filed on August __, 2005 in the Office of the Secretary of
the Commonwealth of Massachusetts.
(j) "Company Officer" shall mean the Chairman and Chief Executive
Officer, the President, each Vice President (whether or not
designated by a number or word or words added before or after the
title "Vice President"), the Secretary, the Treasurer, each
Assistant Secretary and each Assistant Treasurer of the Company and
every other officer or employee of the Company designated as a
"Company Officer" for purposes hereof in a written notice from the
Company to the Auction Agent.
(k) "Holder" shall be a holder of record of one or more APS, listed
as such in the share register maintained by the Paying Agent
pursuant to Section 4.6 hereof.
(l) "Other APS" shall mean the Auction Preferred Shares, Series A,
with a liquidation preference of $50,000 per share plus an amount
equal to accumulated but unpaid dividends thereon (whether or not
earned or declared), of the Company.
(m) "Settlement Procedures" shall mean the Settlement Procedures
attached as Exhibit A to the Broker-Dealer Agreement.
(n) "Submission Deadline" shall mean 1:00 p.m., eastern time, on any
Auction Date or such other time on any Auction Date by which the
Broker-Dealers are required to submit Orders to the Auction Agent as
specified by the Auction Agent from time to time.
(o) "Submission Processing Deadline" shall mean the earlier of (i)
40 minutes after the Submission Deadline and (ii) the time when the
Auction Agent begins to disseminate the results of the Auction to
the Broker-Dealers.
(p) "Submission Processing Representation" shall have the meaning
specified in (Section 2.8) hereof.
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.
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(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
Eastern time.
II. THE AUCTION.
2.1. Purpose; Incorporation by Reference of Auction Procedures and
Settlement Procedures.
(a) The Certificate of Designation provides that the Applicable Rate
on the APS for each Dividend Period therefor after the Initial
Dividend Period shall be the rate per annum that a commercial bank,
trust company or other financial institution appointed by the
Company advises results from implementation of the Auction
Procedures. The Board of Trustees of the Company has adopted a
resolution appointing Deutsche Bank as Auction Agent for purposes of
the Auction Procedures. The Auction Agent hereby accepts such
appointment and agrees that, on each Auction Date, it shall follow
the procedures set forth in this Section 2 and the Auction
Procedures for the purpose of determining the Applicable Rate for
the APS for the next Dividend Period therefor. Each periodic
operation of such procedures is hereinafter referred to as an
"Auction."
(b) All of the provisions contained in the Auction Procedures and in
the Settlement Procedures are incorporated herein by reference in
their entirety and shall be deemed to be a part hereof to the same
extent as if such provisions were set forth fully herein. In the
case of any conflict between the terms of any document incorporated
herein by reference and the terms hereof, the Auction Agent is,
subject to its obligations as set forth in Section 6.1, authorized
to perform its duties according to the terms hereof, and shall have
no liability for so doing.
2.2. Preparation for Each Auction; Maintenance of Registry of Existing
Holders.
(a) As of the date hereof, the Company shall provide the Auction
Agent with a list of the Broker-Dealers and shall cause to be
delivered to the Auction Agent for execution by the Auction Agent a
Broker-Dealer Agreement signed by each such Broker-Dealer. The
Auction Agent shall keep a list of Broker-Dealers with whom it has
signed such Broker-Dealer Agreements, and shall endeavor to keep
such list current and accurate and shall indicate thereon, or on a
separate list, the identity of each Existing Holder, if any, whose
most recent Order was submitted by a Broker-Dealer on such list and
resulted in such Existing Holder continuing to hold or purchasing
the APS. Not later than five Business Days prior to any Auction Date
for which any change in such list of Broker-Dealers is to be
effective, the Company shall notify the Auction Agent in writing of
such change and, if any such change is the addition of a
Broker-Dealer to such list, the Company shall cause to be delivered
to the Auction Agent for execution by the
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Auction Agent a Broker-Dealer Agreement signed by such
Broker-Dealer. The Auction Agent 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 the Auction Date for any Auction shall be
changed after the Auction Agent shall have given the notice referred
to in clause (vii) of Paragraph (a) of the Settlement Procedures,
the Auction Agent, by such means as the Auction Agent deems
practicable, shall give notice of such change to the Broker-Dealers
not later than the earlier of 9:15 A.M. on the new Auction Date or
9:15 A.M. on the old Auction Date.
(c) The provisions contained in Part I, Section 4 of the Certificate
of Designation concerning Special Dividend Periods and the
notification of a Special Dividend Period will be followed by the
Company and, to the extent applicable, the Auction Agent, and the
provisions contained therein are incorporated herein by reference in
their entirety and shall be deemed to be a part of this Agreement to
the same extent as if such provisions were set forth fully herein.
(d) (i) On each Auction Date, the Auction Agent shall determine the
Reference Rate and the Maximum Applicable Rate. If the rate obtained
by the Auction Agent is not quoted on an interest or discount basis,
the Auction Agent shall convert the quoted rate to an interest rate
after consultation with the Company as to the method of such
conversion. Not later than 9:30 A.M. on each Auction Date, the
Auction Agent shall notify the Company and the Broker-Dealers of the
Reference Rate so determined and of the Maximum Applicable Rate.
(ii) If the Reference Rate is the applicable LIBOR Rate and
such rate is to be based on rates supplied by LIBOR Dealers and one
or more of the LIBOR Dealers shall not provide a quotation for the
determination of the applicable LIBOR Rate, the Auction Agent
promptly shall notify the Company so that the Company can determine
whether to select a Substitute LIBOR Dealer or Substitute LIBOR
Dealers to provide the quotation or quotations not being supplied by
any LIBOR Dealer or LIBOR Dealers. The Company promptly shall advise
the Auction Agent of any such selection. If the Company does not
select any such Substitute LIBOR Dealer or Substitute LIBOR Dealers,
then the rates shall be supplied by the remaining LIBOR Dealer or
LIBOR Dealers.
(iii) If, after the date of this Agreement, there is any
change in the prevailing rating of the APS by S&P (or Substitute
Rating Agency or successor rating agency) referred to in the
definition of the Maximum Applicable Rate, subject to the provisions
of Part I, Section 15 of the Certificate of Designation, thereby
resulting in any change in the corresponding applicable percentage
or corresponding applicable spread for the APS, as set forth in said
definition (the "Percentage or Spread"), the Company shall notify
the Auction Agent in writing of such change in the Percentage or
Spread prior to 9:00 A.M. on the Auction
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Date for the APS next succeeding such change. The Percentage for the
APS on the date of this Agreement is as specified in the definition
of "Maximum Rate" in Part II of the Certificate of Designation. The
Auction Agent shall be entitled to conclusively rely on the last
Percentage or Spread of which it has received notice from the
Company (or, in the absence of such notice, the Percentage or Spread
set forth in the preceding sentence) in determining the Maximum
Applicable Rate as set forth in Section 2.2(d)(i) hereof.
(e) The Auction Agent shall maintain by series a current registry of
the Existing Holders of the APS for purposes of each Auction. The
Company shall use its best efforts to provide or cause to be
provided to the Auction Agent within ten Business Days following the
date of the Closing a list of the initial Existing Holders of APS,
and the Broker-Dealer of each such Existing Holder through which
such Existing Holder purchased such shares. The Auction Agent may
conclusively rely upon, as evidence of the identities of the
Existing Holders, such list, the results of each Auction and notices
from any Existing Holder, the Agent Member of any Existing Holder or
the Broker-Dealer of any Existing Holder with respect to such
Existing Holder's transfer of any APS to another Person.
(f) In the event of any partial redemption of any APS, upon notice
by the Company to the Auction Agent of such partial redemption, the
Auction Agent promptly shall request the Securities Depository to
notify the Auction Agent of the identities of the Agent Members (and
the respective numbers of shares) from the accounts of which shares
have been called for redemption and the person or department at such
Agent Member to contact regarding such redemption, and at least two
Business Days prior to the Auction preceding the date of redemption
with respect to such APS being partially redeemed, the Auction Agent
shall request each Agent Member so identified to disclose to the
Auction Agent (upon selection by such Agent Member of the Existing
Holders whose shares are to be redeemed) the number of APS of each
such Existing Holder, if any, to be redeemed by the Company,
provided that the Auction Agent has been furnished with the name and
telephone number of a person or department at such Agent Member from
which it is to request such information. In the absence of receiving
any such information with respect to an Existing Holder, from such
Existing Holder's Agent Member or otherwise, the Auction Agent may
continue to treat such Existing Holder as having ownership of the
number of APS shown in the Auction Agent's registry of Existing
Holders.
(i) The Auction Agent shall register a transfer of the
ownership of APS from an Existing Holder to another Existing Holder,
or to another Person if permitted by the Company, only if (A) such
transfer is made pursuant to an Auction or (B) if such transfer is
made other than pursuant to an Auction, the Auction Agent has been
notified of such transfer in writing in a notice substantially in
the form of Exhibit C to the Broker-Dealer Agreements, by such
Existing Holder or by the Agent Member of such Existing Holder. The
Auction Agent is not required to accept any notice of transfer
delivered for an Auction unless it is received by the Auction Agent
by 3:00 P.M. on the Business Day next
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preceding the applicable Auction Date. The Auction Agent shall
rescind a transfer made on the registry of the Existing Holders of
any APS if the Auction Agent has been notified in writing, in a
notice substantially in the form of Exhibit D to the Broker-Dealer
Agreement, by the Agent Member or the Broker-Dealer of any Person
that (i) purchased any APS and the seller failed to deliver such
shares or (ii) sold any APS and the purchaser failed to make payment
to such Person upon delivery to the purchaser of such shares.
(g) The Auction Agent may, but shall not be obligated, to request
that the Broker-Dealers, as set forth in Section 2.2(c) of the
Broker-Dealer Agreements, provide the Auction Agent with a list of
their respective customers that such Broker-Dealers believe are
Beneficial Owners of any APS. The Auction Agent shall keep
confidential any such information and shall not disclose any such
information so provided to any Person other than the relevant
Broker-Dealer and the Company; provided, however, that the Auction
Agent reserves the right and is authorized to disclose any such
information if (i) it is ordered to do so by a court of competent
jurisdiction or a regulatory body, judicial or quasi-judicial agency
or authority having the authority to compel such disclosure, (ii) it
is advised by its counsel that its failure to do so would be
unlawful or (iii) failure to do so would expose the Auction Agent to
loss, liability, claim, damage or expense for which it has not
received indemnity or security satisfactory to it.
2.3. Auction Schedule.
The Auction Agent shall conduct Auctions in accordance with the schedule
set forth below. Such schedule may be changed by the Auction Agent with the
consent of the Company, which consent shall not be withheld unreasonably. The
Auction Agent shall give notice of any such change to each Broker-Dealer. Such
notice shall be received prior to the first Auction Date on which any such
change shall be effective. The Auction Agent will follow The Bond Market
Association's Market Practice U.S. Holiday Recommendations for shortened trading
days for bond markets (the "BMA Recommendation") unless the Auction Agent is
instructed otherwise by the Company. In the event of a BMA Recommendation on an
Auction Date, the Submission Deadline will be 11:30 A.M. instead of 1:00 P.M.
and as a result the notice of Auction results will occur at an earlier time.
Time Event
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By 9:30 A.M. Auction Agent advises the Company and
the Broker-Dealers of the Reference Rate
and the Maximum Applicable Rate as set
forth in Section 2.2(d)(i) hereof.
9:30 A.M. - 1:00 P.M. Broker-Dealers assemble information
received from each Bidder (Existing
Owners or Potential Owners) and any
internally initiated Broker-Dealers'
Bids in accordance with the Auction
Procedures.
Not later than Submission Auction Agent accepts any Orders
Processing Deadline submitted subject to a Submission
Processing Representation and makes
determinations as provided in Part II,
Section 3 of the Certificate of
Designation. Auction Agent makes
determinations pursuant to Part II,
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Time Event
---- -----
Section 4(a) of the Certificate of
Designation.
By approximately 3:00 P.M. Auction Agent advises the Company of the
results of the Auction as provided in
Part II, Section 4(b) of the Certificate
of Designation.
Submitted Bids and Submitted Sell Orders
are accepted and rejected in whole or in
part and shares of APS allocated as
provided in Part II, Section 5 of the
Certificate of Designation.
2.4. Notice of Auction Results.
On each Auction Date, the Auction Agent shall notify Broker-Dealers of the
results of the Auction held on such date by telephone or other mutually
acceptable electronic means as set forth in Paragraph (a) of the Settlement
Procedures. Unless instructed otherwise in writing by the Company, the Auction
Agent is authorized to release the Applicable Rate determined as a result of the
Auction for public dissemination.
2.5. Broker-Dealers.
(a) Not later than 12:00 noon on each Auction Date, the Company
shall pay to the Auction Agent in Federal Funds or similar same-day
funds an amount in cash equal to (i) in the case of any Auction Date
immediately preceding a 7-Day Dividend Period, the product of (A) a
fraction the numerator of which is the number of days in such
Dividend Period (calculated by counting the first day of such
Dividend Period but excluding the last day thereof) and the
denominator of which is 360, times (B) 1/4 of 1%, times (C) $50,000
times (D) the sum of the aggregate number of Outstanding APS for
which the Auction is conducted and (ii) in the case of any Special
Dividend Period, the amount determined by mutual consent of the
Company and the Broker-Dealers pursuant to Section 2.5 of the
Broker-Dealer Agreements. The Auction Agent shall apply such moneys
as set forth in Section 2.5 of the Broker-Dealer Agreements and
shall thereafter remit to the Company any remaining funds paid to
the Auction Agent pursuant to this Section 2.5(a).
(b) The Company may designate an Affiliate or ▇▇▇▇▇▇▇ Lynch, Pierce,
▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated to act as a Broker-Dealer.
(c) The Auction Agent shall terminate any Broker-Dealer Agreement as
set forth therein if so directed by the Company.
(d) Subject to Section 2.5(b) hereof, the Auction Agent from time to
time shall enter into such Broker-Dealer Agreements as the Company
shall request.
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(e) Subject to Section 2.2(a), the Auction Agent shall maintain a
list of Broker-Dealers.
2.6. Ownership of APS and Submission of Bids by the Company and its
Affiliates.
Neither the Company nor any Affiliate of the Company may submit any Sell
Order or Bid, directly or indirectly, in any Auction, except that an Affiliate
of the Company that is a Broker-Dealer may submit a Sell Order or Bid on behalf
of a Beneficial Owner or a Potential Beneficial Owner. The Company shall notify
the Auction Agent if the Company or, to the best of the Company's knowledge, any
Affiliate of the Company becomes a Beneficial Owner of any APS. Any APS
redeemed, purchased or otherwise acquired (i) by the Company shall not be
reissued, except in accordance with the requirements of the Securities Act of
1933, as amended, or (ii) by its Affiliates shall not be transferred (other than
to the Company). The Auction Agent shall have no duty or liability with respect
to enforcement of this Section 2.6.
2.7. Access to and Maintenance of Auction Records.
The Auction Agent shall afford to the Company, its agents, independent
public accountants and counsel, access at reasonable times during normal
business hours to review and make extracts or copies (at the Company's sole cost
and expense) of all books, records, documents and other information concerning
the conduct and results of Auctions, provided that any such agent, accountant or
counsel shall furnish the Auction Agent with a letter from the Company
requesting that the Auction Agent afford such person access. The Auction Agent
shall maintain records relating to any Auction for a period of two years after
such Auction (unless requested by the Company to maintain such records for such
longer period not in excess of four years, then for such longer period which
shall not be in excess of four years), and such records, in reasonable detail,
shall accurately and fairly reflect the actions taken by the Auction Agent
hereunder. The Company agrees to keep confidential any information regarding the
customers of any Broker-Dealer received from the Auction Agent in connection
with this Agreement or any Auction, and shall not disclose such information or
permit the disclosure of such information without the prior written consent of
the applicable Broker-Dealer to anyone except such agent, accountant or counsel
engaged to audit or review the results of Auctions as permitted by this Section
2.7, provided that the Company reserves the right to disclose any such
information if it is advised by its counsel that its failure to do so would (i)
be unlawful or (ii) expose it to liability, unless the Broker-Dealer shall have
offered indemnification satisfactory to the Company. Any such agent, accountant
or counsel, before having access to such information, shall agree to keep such
information confidential and not to disclose such information or permit
disclosure of such information without the prior written consent of the
applicable Broker-Dealer, provided that such agent, accountant or counsel may
reserve the right to disclose any such information if it is advised by its
counsel that its failure to do so would (i) be unlawful or (ii) expose it to
liability, unless the Broker-Dealer shall have offered indemnification
satisfactory to such agent, accountant or counsel. The Auction Agent shall have
no liability in connection with allowing access to the Company's books, records,
documents and other information pursuant to the terms of this Section 2.7 to the
Company, its agents, independent public accountants and counsel.
2.8 Submission Processing Representation.
Broker-Dealers may submit an Order after the Submission Deadline and prior
to the Submission Processing Deadline if the Order was (i) received by the
Broker-Dealer from Existing Owners or Potential Owners prior to the Submission
Deadline or (ii) initiated internally by the Broker-Dealer for its own account
prior to the Submission Deadline. Each Order submitted to the Auction Agent
after the Submission Deadline and prior to the Submission Processing Deadline
shall constitute a representation by the Broker-Dealer that such Order was (i)
received from an Existing Owner or Potential Owner prior to the Submission
Deadline or (ii) initiated internally by the Broker-Dealer for its own account
prior to the Submission Deadline (the "Submission Processing Representation").
III. THE AUCTION AGENT AS PAYING AGENT.
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3.1. The Paying Agent.
The Board of Trustees of the Company has adopted a resolution appointing
Deutsche Bank Trust Company Americas as transfer agent, registrar, dividend
disbursing agent and redemption agent for the Company in connection with the APS
(in such capacity, the "Paying Agent"). The Paying Agent hereby accepts such
appointment and agrees to act in accordance with its standard procedures and the
provisions of the Certificate of Designation which are specified herein with
respect to the APS and as set forth in this Section 3.
3.2. The Company's Notices to the Paying Agent.
Whenever any APS are to be redeemed, the Company promptly shall deliver to
the Paying Agent a Notice of Redemption upon the terms set forth in Section 4(c)
of the Certificate of Designation, which will be mailed by the Company to each
Holder at least five Business Days prior to the date such Notice of Redemption
is required to be mailed pursuant to the Certificate of Designation. The Paying
Agent shall have no responsibility to confirm or verify the accuracy of any such
Notice.
3.3. The Company to Provide Funds for Dividends and Redemptions.
(a) Not later than noon on each Dividend Payment Date, the Company
shall deposit with the Paying Agent an aggregate amount of Federal
Funds or similar same-day funds equal to the declared dividends to
be paid to Holders on such Dividend Payment Date, and shall give the
Paying Agent irrevocable instructions to apply such funds to the
payment of such dividends on such Dividend Payment Date.
(b) If the Company shall give a Notice of Redemption, then by noon
of the date fixed for redemption, the Company shall deposit in trust
with the Paying Agent an aggregate amount of Federal Funds or
similar same-day funds sufficient to redeem such shares of APS
called for redemption and shall give the Paying Agent irrevocable
instructions and authority to pay the redemption price to the
Holders of shares of APS called for redemption upon surrender of the
certificate or certificates therefor.
3.4. Disbursing Dividends and Redemption Price.
After receipt of the Federal Funds or similar same-day funds and
instructions from the Company described in Sections 3.3(a) and (b) above, the
Paying Agent shall pay to the Holders (or former Holders) entitled thereto (i)
on each corresponding Dividend Payment Date, dividends on the APS and (ii) on
any date fixed for redemption, the redemption price of any APS called for
redemption. The amount of dividends for any Dividend Period to be paid by the
Paying Agent to Holders will be determined by the Company as set forth in Part
I, Section 2 of the Certificate of Designation. The redemption price to be paid
by the Paying Agent to the Holders of any APS called for redemption will be
determined as set forth in Part I, Section 3 of the Certificate of Designation.
The Company shall notify the Paying Agent in writing of a decision to redeem any
APS on or prior to the date specified in Section 3.2 above, and such notice by
the Company to the Paying Agent shall contain the information required to be
stated in a Notice of Redemption
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required to be mailed by the Company to such Holders. The Paying Agent shall
have no duty to determine the redemption price and may rely conclusively on the
amount thereof set forth in a Notice of Redemption.
IV. THE PAYING AGENT AS TRANSFER AGENT AND REGISTRAR.
4.1. Original Issue of Share Certificates.
On the Date of Original Issue for any APS, one certificate for the APS
shall be issued by the Company and registered in the name of Cede & Co., as
nominee of the Securities Depository, and countersigned by the Paying Agent. The
Company will give the Auction Agent prior written notice and instruction as to
the issuance and redemption of APS.
4.2. Registration of Transfer or Exchange of Shares.
Except as provided in this Section 4.2, the APS shall be registered solely
in the name of the Securities Depository or its nominee. If the Securities
Depository shall give notice of its intention to resign as such, and if the
Company shall not have selected a substitute Securities Depository acceptable to
the Paying Agent prior to such resignation, then upon such resignation, the APS,
at the Company's request and expense, may be registered for transfer or
exchange, and new certificates thereupon shall be issued in the name of the
designated transferee or transferees, upon surrender of the old certificate in
form deemed by the Paying Agent properly endorsed for transfer with (a) all
necessary endorsers' signatures guaranteed in such manner and form as the Paying
Agent may require by a guarantor reasonably believed by the Paying Agent to be
responsible, (b) such assurances as the Paying Agent shall deem necessary or
appropriate to evidence the genuineness and effectiveness of each necessary
endorsement and (c) satisfactory evidence of compliance with all applicable laws
relating to the collection of taxes in connection with any registration of
transfer or exchange or funds necessary for the payment of such taxes.
4.3. Removal of Legend.
Any request for removal of a legend indicating a restriction on transfer
from a certificate evidencing APS shall be accompanied by an opinion of counsel
stating that such legend may be removed and such shares may be transferred free
of the restriction described in such legend, said opinion to be delivered under
cover of a letter from a Company Officer authorizing the Paying Agent to remove
the legend on the basis of said opinion.
4.4. Lost, Stolen or Destroyed Share Certificates.
The Paying Agent shall issue, at the Holder's expense, and register
replacement certificates for certificates represented to have been lost, stolen
or destroyed, upon the fulfillment of such requirements as shall be deemed
appropriate by the Company and by the Paying Agent, subject at all times to
provisions of law, the By-Laws of the Company governing such matters and
resolutions adopted by the Company with respect to lost, stolen or destroyed
securities. The Paying Agent may issue new certificates in exchange for and upon
the cancellation of mutilated certificates. Any request by the Company to the
Paying Agent to issue a replacement or new certificate pursuant to this Section
4.4 shall be deemed to be a representation and warranty by the Company to the
Paying
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Agent that such issuance will comply with provisions of applicable law and the
By-Laws and resolutions of the Company.
4.5. Disposition of Canceled Certificates; Record Retention.
The Paying Agent shall retain share certificates which have been canceled
in transfer or in exchange and accompanying documentation in accordance with
applicable rules and regulations of the Securities and Exchange Commission for
two calendar years from the date of such cancellation. The Paying Agent, upon
written request by the Company, shall afford to the Company, its agents and
counsel access at reasonable times during normal business hours to review and
make extracts or copies (at the Company's sole cost and expense) of such
certificates and accompanying documentation. Upon request by the Company at any
time during this two-year period, the Paying Agent shall deliver to the Company
the canceled certificates and accompanying documentation. The Company, at its
expense, shall retain such records for a minimum additional period of four
calendar years from the date of delivery of the records to the Company and shall
make such records available during this period at any time, or from time to
time, for reasonable periodic, special, or other examinations by representatives
of the Securities and Exchange Commission. The Company also shall undertake to
furnish to the Securities and Exchange Commission, upon demand, either at their
principal office or at any regional office, complete, correct and current hard
copies of any and all such records.
4.6. Share Register.
The Paying Agent shall maintain the share register, which shall contain a
list of the Holders, the number of shares held by each Holder and the address of
each Holder. The Paying Agent shall record in the share register any change of
address of a Holder upon notice by such Holder. In case of any written request
or demand for the inspection of the share register or any other books of the
Company in the possession of the Paying Agent, the Paying Agent will notify the
Company and secure instructions as to permitting or refusing such inspection;
provided, however, that the Auction Agent reserves the right and is authorized
to permit such inspection if (i) it is ordered to do so by a court of competent
jurisdiction or a regulatory body, judicial or quasi-judicial agency or
authority having the authority to compel such disclosure, (ii) it is advised by
its counsel that its failure to do so would be unlawful or (iii) failure to do
so would expose the Auction Agent to loss, liability, claim, damage or expense
for which it has not received indemnity or security satisfactory to it.
4.7. Return of Funds.
Any funds deposited with the Paying Agent by the Company for any reason
under this Agreement, including for the payment of dividends or the redemption
of any APS, that remain with the Paying Agent after 12 months shall be repaid to
the Company upon written request by the Company.
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V. REPRESENTATIONS AND WARRANTIES.
5.1. Representations and Warranties of the Company.
The Company represents and warrants to the Auction Agent that:
(i) the Company is a duly organized and validly existing trust
in good standing under the laws of The Commonwealth of
Massachusetts, and has full power to execute and deliver this
Agreement and to authorize, create and issue the APS;
(ii) the Company is registered with the Securities and
Exchange Commission under the Investment Company Act of 1940, as
amended, as a closed-end, non-diversified, management investment
company;
(iii) this Agreement has been duly and validly authorized,
executed and delivered by the Company and constitutes the legal,
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, subject as to such
enforceability to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors'
rights and to general equitable principles;
(iv) the forms of the certificates evidencing the APS comply
with all applicable laws of The Commonwealth of Massachusetts;
(v) the APS have been duly and validly authorized by the
Company and, upon completion of the initial sale of the APS and
receipt of payment therefor, will be validly issued, fully paid and
nonassessable;
(vi) at the time of the offering of the APS, the shares
offered will be registered under the Securities Act of 1933, as
amended, and no further action by or before any governmental body or
authority of the United States or of any state thereof is required
in connection with the execution and delivery of this Agreement or
will be required in connection with the issuance of the APS, except
such action as required by applicable state securities laws, all of
which action will have been taken;
(vii) the execution and delivery of this Agreement and the
issuance and delivery of the APS do not and will not conflict with,
violate, or result in a breach of, the terms, conditions or
provisions of, or constitute a default under, the Declaration of
Trust, Certificate of Designation or the By-Laws of the Company, any
law or regulation applicable to the Company, any order or decree of
any court or public authority having jurisdiction over the Company,
or any mortgage, indenture, contract, agreement or undertaking to
which the Company is a party or by which it is bound; and
(viii) no taxes are payable upon or in respect of the
execution of this Agreement or will be payable upon or in respect of
the issuance of the APS.
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5.2. Representations and Warranties of the Auction Agent.
The Auction Agent represents and warrants to the Company that the Auction
Agent is duly organized and is validly existing as a banking corporation in good
standing under the laws of the State of New York, and has the corporate power to
enter into and perform its obligations under this Agreement.
The Auction Agent represents and warrants to the Company that:
(i) this Agreement has been duly and validly authorized,
executed and delivered by the Auction Agent and constitutes the
legal, valid and binding obligation of the Auction Agent,
enforceable against the Auction Agent in accordance with its terms,
subject as to such enforceability to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to
or affecting creditors' rights and to general equitable principles.
VI. THE AUCTION AGENT.
6.1. Duties and Responsibilities.
(a) The Auction Agent is acting solely as agent for the Company
hereunder and owes no fiduciary duties to any Person except as
specifically provided by this Agreement. The Auction Agent owes no
duties to any person other than the Company by reason of this
Agreement.
(b) The Auction Agent undertakes to perform such duties and only
such duties as are set forth specifically in this Agreement, and no
implied covenants or obligations shall be read into this Agreement
against the Auction Agent.
(c) In the absence of willful misconduct or negligence on its part,
the Auction Agent shall not be liable for any action taken, suffered
or omitted by it or for any error of judgment made by it in the
performance of its duties under this Agreement. The Auction Agent
shall not be liable for any error of judgment made in the absence of
willful misconduct unless the Auction Agent shall have been
negligent in ascertaining (or failing to ascertain) the pertinent
facts.
(d) The Auction Agent shall not be responsible or liable for any
failure or delay in the performance of its obligations under this
Agreement arising out of or caused, directly or indirectly, by
circumstances beyond its reasonable control, including, without
limitation, acts of God; earthquakes; fires, floods; wars; civil or
military disturbances; sabotage; acts of war or terrorism;
epidemics; riots; interruptions, loss or malfunctions of utilities;
computer (hardware or software) or communications services;
accidents; labor disputes (including, without limitation, strikes or
work stoppages); acts of civil or military authority or governmental
actions; it being understood that the Auction Agent shall use
reasonable efforts which are consistent with accepted practices in
the banking industry to resume performance as soon as practicable
under the circumstances. In no event shall the Auction Agent be
responsible or liable for special, indirect or consequential loss
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or damage of any kind whatsoever (including, but not limited to,
loss of profit), even if the Auction Agent has been advised of the
likelihood of such loss or damage and regardless of the form of
action.
6.2. Rights of the Auction Agent.
(a) The Auction Agent may conclusively rely upon, and shall be
protected in acting or refraining from acting upon, any
communication authorized hereby and any written instruction, notice,
request, direction, consent, report, certificate, share certificate
or other instrument, paper or document reasonably believed by it to
be genuine. The Auction Agent shall not be liable for acting upon
any telephone communication or by other electronic means acceptable
to the parties authorized hereby which the Auction Agent believes in
good faith to have been given by the Company or by a Broker-Dealer.
The Auction Agent may record telephone communications with the
Company or with the Broker-Dealers or with both.
(b) The Auction Agent may consult with counsel of its choice, and
the written advice of such counsel shall be full and complete
authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reasonable
reliance thereon.
(c) The Auction Agent shall not be required to advance, expend or
risk its own funds or otherwise incur or become exposed to financial
liability in the performance of its duties hereunder. The Auction
Agent shall be under no liability for interest on any money received
by it hereunder except as otherwise agreed in writing with the
Company.
(d) The Auction Agent may perform its duties and exercise its rights
hereunder either directly or by or through agents or attorneys.
(e) The Auction Agent shall have no obligation or liability with
respect to the registration or exemption therefrom of the APS under
the federal or state securities laws or with respect to the
sufficiency or the conformity of any transfer of the APS to the
terms of the Auction Agreement, the Broker-Dealer Agreements, the
APS or any other document contemplated thereby.
6.3. Auction Agent's Disclaimer.
The Auction Agent makes no representation as to the validity or the
adequacy of the Broker-Dealer Agreements or the APS.
6.4. Compensation, Expenses and Indemnification.
(a) The Company shall pay to the Auction Agent reasonable
compensation for all services rendered by it under this Agreement
and under the Broker-Dealer Agreements as shall be agreed by the
Auction Agent and the Company from time
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to time as shall be set forth in a separate writing signed by the
Company and the Auction Agent, subject to adjustments if the APS no
longer are held of record by the Securities Depository or its
nominee or if there shall be such other change as shall increase
materially the Auction Agent's obligations hereunder or under the
Broker-Dealer Agreements.
(b) The Company shall reimburse the Auction Agent upon its request
for all reasonable expenses, disbursements and advances incurred or
made by the Auction Agent in accordance with any provision of this
Agreement and of the Broker-Dealer Agreements (including the
reasonable compensation, expenses and disbursements of its agents
and counsel), except any expense, disbursement or advance
attributable to its negligence or willful misconduct.
(c) The Company shall indemnify the Auction Agent for, and hold it
harmless against, any loss, liability or expense incurred without
negligence or willful misconduct on its part arising out of or in
connection with its agency under this Agreement and under the
Broker-Dealer Agreements, including the costs and expenses of
defending itself against any claim of liability in connection with
its exercise or performance of any of its duties hereunder and
thereunder, except such as may result from its negligence or willful
misconduct.
VII. MISCELLANEOUS.
7.1. Term of Agreement.
(a) The term of this Agreement is unlimited unless it shall be
terminated as provided in this Section 7.1. The Company may
terminate this Agreement at any time by so notifying the Auction
Agent, provided that if any APS remain outstanding the Company shall
have entered into an agreement in substantially the form of this
Agreement with a successor auction agent. The Auction Agent may
terminate this Agreement upon prior notice to the Company on the
date specified in such notice, which date shall be no earlier than
60 days after delivery of such notice. If the Auction Agent resigns
while any APS remain outstanding, the Company shall use its best
efforts to enter into an agreement with a successor auction agent
containing substantially the same terms and conditions as this
Agreement.
(b) Except as otherwise provided in this Section 7.1(b), the
respective rights and duties of the Company and the Auction Agent
under this Agreement shall cease upon termination of this Agreement.
The Company's representations, warranties, covenants and obligations
to the Auction Agent under Sections 5 and 6.4 hereof shall survive
the termination hereof. Upon termination of this Agreement, the
Auction Agent shall (i) resign as Auction Agent under the
Broker-Dealer Agreements, (ii) at the Company's request, deliver
promptly to the Company copies of all books and records maintained
by it in connection with its duties hereunder, and (iii) at the
request of the Company, transfer promptly to the Company or to any
successor auction agent any funds deposited by the Company
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with the Auction Agent (whether in its capacity as Auction Agent or
as Paying Agent) pursuant to this Agreement which have not been
distributed previously by the Auction Agent in accordance with this
Agreement.
(c) If the APS shall no longer settle through an electronic book
entry system, the Auction Agent (but not necessarily the Paying
Agent) shall cease to perform its duties hereunder, and under any
Broker-Dealer Agreement.
7.2. Communications.
Except for (i) communications authorized to be made by telephone (or by
other electronic means acceptable to the parties) pursuant to this Agreement or
the Auction Procedures and (ii) communications in connection with Auctions
(other than those expressly required to be in writing), all notices, requests
and other communications to any party hereunder shall be in writing (including
telecopy or similar writing) and shall be given to such party at its address or
telecopier number set forth below:
If to the Company, THE MASSACHUSETTS HEALTH &
addressed to: EDUCATION TAX-EXEMPT TRUST
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Auction Deutsche Bank Trust Company Americas
Agent, addressed to: Trust and Securities Services
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Auction Rate Securities
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address or telecopier number as such party hereafter may specify
for such purpose by notice to the other party. Each such notice, request or
communication shall be effective when delivered at the address specified herein.
Communications shall be given on behalf of the Company by a Company Officer and
on behalf of the Auction Agent by an Authorized Officer.
7.3. Entire Agreement.
This Agreement contains the entire agreement between the parties relating
to the subject matter hereof, and there are no other representations,
endorsements, promises, agreements or understandings, oral, written or inferred,
between the parties relating to the subject matter hereof, except for agreements
relating to the compensation of the Auction Agent.
7.4. Benefits.
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Nothing herein, express or implied, shall give to any Person, other than
the Company, the Auction Agent and their respective successors and assigns, any
benefit of any legal or equitable right, remedy or claim hereunder.
7.5. Amendment; Waiver.
(a) This Agreement shall not be deemed or construed to be modified,
amended, rescinded, canceled or waived, in whole or in part, except
by a written instrument signed by a duly authorized representative
of the party to be charged. The Company shall notify the Auction
Agent of any change in the Certificate of Designation prior to the
effective date of any such change. If any such change in the
Certificate of Designation materially increases the Auction Agent's
obligations hereunder, the Company shall obtain the written consent
to the Auction Agent prior to the effective date of such change.
(b) Failure of either party hereto to exercise any right or remedy
hereunder in the event of a breach hereof by the other party shall
not constitute a waiver of any such right or remedy with respect to
any subsequent breach.
7.6. Successors and Assigns.
This Agreement shall be binding upon, inure to the benefit of, and be
enforceable by, the respective successors and permitted assigns of each of the
Company and the Auction Agent. This Agreement may not be assigned by either
party hereto absent the prior written consent of the other party, which consent
shall not be withheld unreasonably.
7.7. Severability.
If any clause, provision or section hereof shall be ruled invalid or
unenforceable by any court of competent jurisdiction, the invalidity or
unenforceability of such clause, provision or section shall not affect any of
the remaining clauses, provisions or sections hereof.
7.8. Execution in Counterparts.
This Agreement may be executed in several counterparts, each of which
shall be an original and all of which shall constitute but one and the same
instrument.
7.9. Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York applicable to agreements made and to be performed
in said State.
7.10. Personal Liability.
The Declaration of Company organizing The Massachusetts Health & Education
Tax-Exempt Trust, dated April 20, 1993, a copy of which, together with all
amendments thereto (the "Declaration"), is on file in the office of the
Secretary of the Commonwealth of Massachusetts, provides that the name "The
Massachusetts Health & Education Tax-Exempt Trust" refers to the
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Trustees under the Declaration collectively as Trustees, but not as individuals
personally; and no Trustee, shareholder, officer, employee or agent of the
Company shall be held to any personal liability, nor shall resort be had to
their private property for the satisfaction of any obligation or claim or
otherwise in connection with the affairs of the Company, but the "Trust
Property" only shall be liable.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the date first above written.
THE MASSACHUSETTS HEALTH & EDUCATION
TAX-EXEMPT TRUST
By: ________________________________
Name:
Title:
DEUTSCHE BANK TRUST COMPANY AMERICAS
By: ________________________________
Name:
Title:
By: ________________________________
Name:
Title:
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