Exhibit (k)(3)
EXECUTION COPY
EXHIBIT A
TO AUCTION AGENT AGREEMENT
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FORM OF BROKER-DEALER AGREEMENT
among
THE BANK OF NEW YORK
as Auction Agent
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as Broker-Dealer
Dated as of __________ __, 2001
Relating to
MUNICIPAL AUCTION RATE CUMULATIVE PREFERRED SHARES OF BLACKROCK [STATE]
MUNICIPAL INCOME TRUST
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BROKER-DEALER AGREEMENT dated as of __________ __, 2001 (this "Agreement"),
among (i) The Bank of New York, a New York banking corporation, as auction agent
(the "Auction Agent") (not in its individual capacity but solely as agent)
pursuant to Trust granted to it in the Auction Agent Agreement, (ii)
_____________________________, a __________ Delaware business trust (the
"Trust"), and (iii) as broker-dealer (together with its successors and assigns
as such hereinafter referred to as "BD").
The Trust intends to issue Shares of one or more Series of Municipal
Auction Rate Cumulative Preferred Shares, liquidation preference $25,000 per
share (the "Preferred Shares"). The Shares of each Series of Preferred Shares
shall be issued in book-entry form through the facilities of the Securities
Depository. References to "Shares of Preferred Shares" or "Preferred Shares" in
this Agreement shall refer only to the beneficial interests in the Preferred
Shares unless the context otherwise requires.
The Auction Procedures require the participation of a Broker-Dealer.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Auction Agent, the Trust and BD
agree as follows:
1. Definitions and Rules of Construction
1.1 Terms Defined by Statement of Preferences. Capitalized terms not
defined herein shall have the respective meanings specified in the Statement.
1.2 Terms Defined Herein. 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 the member of, or
participant in, the Securities Depositary that will act on behalf of a Bidder.
(b) "Agreement" shall mean the Basic Terms, together with the
Request and Acceptance Letter relating to one or more series of Preferred
Shares.
(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 form of Statement as of the filing thereof.
(e) "Authorized Officer" of the Auction Agent shall mean each
Senior Vice President, Vice President, Assistant Vice President, Assistant
Treasurer and Assistant Secretary of the Auction Agent assigned to its Corporate
Trust and Agency Group and every other officer or employee of the Auction Agent
designated as an "Authorized Officer" for purposes hereof in a communication to
the Trust.
(f) "Preferred Shares" shall mean the Preferred Shares, par
value $.001 per share, of the Trust designated as its "Municipal Auction Rate
Cumulative Preferred Shares" and bearing such further designation as to series
as the Board of Trustees, as the case may be, of
the Trust or any committee thereof shall specify; as set forth in the Request
and Acceptance Letter.
(g) "Settlement Procedures" shall mean the Settlement Procedures
attached to the Auction Agent Agreement as Exhibit B.
(h) "Statement" shall mean the Statement of Preferences of
Municipal Auction Rate Cumulative Preferred Shares, as the same may be amended,
supplemented or modified from time to time.
(i) "Trust Officer" shall mean the Chairman and Chief Executive
Officer, the President, each Vice President (whether or not designated by a
number or word or words added before or after the title "Vice President"), the
Secretary, the Treasurer, each Assistant Vice President, each Assistant
Secretary and each Assistant Treasurer of the Trust and every other officer or
employee of the Trust designated as a "Trust Officer" for purposes hereof in a
notice to the Auction Agent.
1.3 Rules of Construction. Unless the context or use indicates
another or different meaning or intent, the following rules shall apply to the
construction of this Agreement:
(a) Words importing the singular number shall include the plural
number and vice versa.
(b) The captions and headings herein are solely for convenience
of reference and shall not constitute a part of this Agreement nor shall they
affect its meaning, construction or effect.
(c) The words "hereof," "herein," "hereto," and other words of
similar import refer to this Agreement as a whole.
(d) All references herein to a particular time of day shall be
to New York City time.
(e) This Agreement shall apply separately but equally to all
Series of PREFERRED SHARES that may be issued.
1.4 Warranties of BD. BD hereby represents and warrants that this
Broker-Dealer Agreement has been duly authorized, executed and delivered by BD
and that, assuming the due authorization, execution and delivery hereof by the
Auction Agent, this Broker-Dealer Agreement constitutes a valid and binding
agreement of BD, enforceable against it in accordance with its terms. BD's
representations and warranties in this Section 1.4 shall survive the termination
of this Agreement.
2. The Auctions
2.1 Purpose; Incorporation by Reference of Auction Procedures and
Settlement Procedures.
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(a) On each Auction Date, the provisions of the Auction
Procedures will be followed by the Auction Agent for the purpose of determining
the Applicable Rate for the Preferred Shares for the next Dividend Period. 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 of this Agreement to the same extent
as if such provisions were fully set forth herein.
(c) BD is delivering herewith, or has previously delivered, a
Purchaser's Letter executed by the purchaser. BD agrees to act as, and assumes
the obligations of and limitations and restrictions placed upon, a Broker-Dealer
under this Agreement.
(d) BD acknowledges and agrees that each provision of the
Auction Procedures that requires BD to perform an obligation or procedure is
hereby incorporated herein by reference and that this Agreement shall constitute
the Trust's instruction, and BD hereby agrees, to perform such obligations and
procedures without further request by or instructions from the Trust.
(e) BD may participate in Auctions for its own account.
2.2 Preparation for Each Auction.
(a) Not later than 9:30 a.m. on each Auction Date, the Auction
Agent shall advise BD by telephone or other electronic means, to be confirmed in
writing by the Auction Agent, of the Maximum Rate, Reference Rate(s) and
Treasury Note Rate(s).
(b) BD shall cause the Maximum Rate to be communicated as
promptly as practicable to its customers who hold or may be interested in
acquiring Preferred Shares.
(c) As promptly as practicable after determining each Auction
Date, but not later than 9:15 a.m. on the Business Day preceding such Auction
Date, the Auction Agent shall notify BD, by such means as the Auction Agent
deems practicable, of the scheduled date of such Auction Date. If the Auction
Date for any Auction shall be changed after the Auction Agent has given such
notice or the notice referred to in clause (vii) of paragraph (a) of the
Settlement Procedures, the Auction Agent, by such means as the Auction Agent
deems practicable, shall give notice of such change to BD not later than the
earlier of (x) 9:15 a.m. on the Business Day preceding the new Auction Date, and
(y) 9:15 a.m. on the original Auction Date. Thereafter, BD shall promptly notify
customers of BD that are Existing Holders of such change in the Auction Date.
(d) If required by applicable law, or requested by the Auction
Agent, BD shall provide a list of Existing Holders based upon inquiries of those
Persons such Broker-Dealer believes are Beneficial Owners as a result of the
most recent Auction to the Auction Agent promptly after any date so requested by
the Auction Agent. The Auction Agent shall keep confidential any such
information, including information received as to the identity of Bidders in any
Auction, and shall not disclose any such information so provided to any Person
other than the other parties hereto, provided that the Auction Agent each
reserves the right to disclose any such information if (a) it is ordered to do
so by a court of competent jurisdiction or a regulatory,
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judicial or quasi-judicial agency, (b) it is advised by its counsel that its
failure to do so would be unlawful or (c) failure to do so would expose the
Auction Agent to loss, liability, claim, damage or expense for which it has not
received indemnity satisfactory to it.
(e) BD agrees to maintain a list of customers relating to a
series of Preferred Shares and to use its best efforts, subject to existing laws
and regulations, to contact the customers on such list whom BD believe may be
interested in participating in the Auction on each Auction Date, as a Potential
Holder or a Potential Beneficial Owner, for the purposes set forth in the
Auction Procedures. Nothing herein shall require BD to submit an Order for any
customer in any Auction.
(f) The Auction Agent's registry of Existing Holders of shares
of a series of Preferred Shares shall be conclusive and binding on BD. BD may
inquire of the Auction Agent between 3:00 P.M. on the Business Day preceding an
Auction for shares of a series of preferred Shares and 9:30 A.M. on the Auction
Date for such Auction to ascertain the number of shares of such series in
respect of which the Auction Agent has determined BD to be an Existing Holder.
If BD believes it is the Existing Holder of fewer shares of such series than
specified by the Auction Agent in response to BD's inquiry, BD may so inform the
Auction Agent of that belief. BD shall not, in its capacity as Existing Holder
of shares of such series, submit Orders in such Auction in respect of shares of
such series covering in the aggregate more than the number of shares of such
series specified by the Auction Agent in response to BD's inquiry.
2.3 Auction Schedule; Method of Submission of Orders.
(a) The Auction Agent shall conduct Auctions in accordance with
the schedule set forth below. Such schedule may be changed at any time by the
Auction Agent with the consent of the Trust, which consent shall not be
unreasonably withheld. The Auction Agent shall give written notice of any such
change to BD which shall have the right to review such change. Such notice shall
be received one Business Day prior to the first Auction Date on which any such
change shall be effective.
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Time Event
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By 9:30 a.m. Auction Agent advises the Trust and the
Broker-Dealer of the applicable Maximum Rate
and the Reference Rate(s) and Treasury Note
Rate(s) as set forth in Section 2.2(a) hereof.
9:30 a.m. - 1:30 p.m. Auction Agent assembles information
communicated to it by Broker-Dealer as
provided in Section 2(a) of the Auction
Procedures. Submission Deadline is 1:30 p.m.
Not earlier than Auction Agent makes determinations pursuant
1:30 p.m. to 3(a) of the Auction Procedures.
By approximately Auction Agent advises the Trust of results
3:30 p.m. of Auction as provided in Section 3(b) of the
Auction Procedures. Submitted Bids and
Submitted Sell Orders are accepted and
rejected in whole or in part and Preferred
Shares are 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.
(b) BD may designate one or more individuals in its organization
who will coordinate its procedures in connection with Auctions and purchases and
sales of Shares of any Series of Preferred Shares.
(c) BD agrees to handle its customers' order in accordance with
its duties under applicable securities laws and rules.
(d) To that extent that pursuant to Section 4 of the Auction
Procedures of any Trust, BD continues to hold, sells or purchases a number of
shares that is fewer than the number of shares in an Order submitted by BD to
the Auction Agent in which BD designated itself as an Existing Holder or
Potential Holder in respect of customer Orders, BD shall make appropriate pro
rata allocations among its customers for which it submitted Orders of similar
tenor. If as a result of such allocations, any Beneficial Owner would be
entitled or required to purchase, a fraction of a Preferred Share on any Auction
Date, BD shall, in such manner as it shall determine in its sole discretion,
round up or down the number of Preferred Shares to be purchased or sold on such
Auction Date by any Beneficial Owner or Potential Beneficial Owner
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on whose behalf BD submitted an Order so that the number of shares so purchased
or sold by each such Beneficial Owner or Potential Beneficial Owner on such
Auction Date shall be whole shares.
(e) BD shall submit Orders to the Auction Agent in writing in
substantially the form attached hereto as Exhibit A. BD shall submit separate
Orders to the Auction Agent for each Potential Holder or Existing Holder on
whose behalf BD is submitting an Order and shall not net or aggregate the Orders
of Potential Holders or Existing Holders on whose behalf BD is submitting
Orders.
(f) BD shall deliver to the Auction Agent a written notice,
substantially in the form attached hereto as Exhibit B, of transfers of
Preferred Shares made through BD by an Existing Holder to another Person other
than pursuant to an Auction and a written notice, substantially in the form
attached hereto as Exhibit C, of the failure of any Preferred Shares to be
transferred to or by any Person that purchased or sold Preferred Shares through
BD pursuant to an Auction. The Auction Agent is not required to accept any
notice delivered pursuant to the terms of the foregoing sentence with respect to
an Auction unless it is received by the Auction Agent by 3:30 p.m. on the
Business Day next preceding the applicable Auction Date.
2.4 Notices.
(a) On each Auction Date, the Auction Agent shall notify BD by
telephone or facsimile (or other electronic means acceptable to both parties) of
the results of the Auction as set forth in paragraph (a) of the Settlement
Procedures. By approximately 11:30 A.M. on the Business Day next succeeding such
Auction Date, the Auction Agent shall notify BD in writing of the disposition of
all Orders submitted by BD in the Auction held on such Auction Date.
(b) BD shall notify each Existing Holder or Potential Holder on
whose behalf BD has submitted an Order as set forth in paragraph (b) of the
Settlement Procedures and take such other action as is required of BD pursuant
to the Settlement Procedures.
2.5 Designation of Special Rate Period.
(a) If any Trust delivers to its Auction Agent a notice of the
Auction Date for any series of Preferred Shares of such Trust for a Rate Period
thereof that next succeeds a Rate period that is not a Minimum Rate Period in
the form of Exhibit C to the Auction Agency Agreement, and BD is a Broker-
Dealer of such series, the Auction Agent shall deliver such notice to BD as
promptly as practicable after its receipt of such notice from such Trust.
(b) If the Board of Trustees of any Trust proposes to designate
any succeeding Subsequent Rate Period of any series of Preferred Shares of such
Trust as a Special Rate Period and such Trust delivers to its Auction Agent a
notice of such proposed Special Rate Period in the form of Exhibit D to the
Auction Agency Agreement, and BD is a Broker-Dealer for such series, such
Auction Agent shall deliver such notice to BD as promptly as practicable after
its receipt of such notice from the Trust.
(c) If the Board of Trustees of any Trust determines to designate
such succeeding Subsequent Rate Period as a Special Rate Period, and such Trust
delivers to its
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Auction Agent a notice of such Special Rate Period in the form of Exhibit E to
the Auction Agency Agreement not later than 11:00 A.M. on the second Business
Day next preceding the first day of such Rate Period (or by such later time or
date, or both, as may be agreed to by such Auction Agent), and BD is a Broker-
Dealer for such series, such Auction Agent shall deliver such notice to BD not
later than 3:00 P.M. on such second Business Day (or, if such Auction Agent has
agreed to a later time or date, as promptly as practicable thereafter).
(d) If any Trust shall deliver to its Auction Agent a notice not
later than 11:00 A.M. on the second Business Day next preceding the first day of
any Rate Period (or by such later time or date, or both, as may be agreed to by
such Auction Agent) stating that such Trust has determined not to exercise its
option to designate such succeeding Subsequent Rate Period as a Special Rate
Period, in the form of Exhibit F to the Auction Agency Agreement, or shall fail
to timely deliver either such notice or a notice in the form of Exhibit E to the
Auction Agency Agreement, and BD is a Broker-Dealer for such series, such
Auction Agent shall deliver a notice in the form of Exhibit F to the Auction
Agency Agreement to BD not later than 3:00 P.M. on such second Business Day (or,
if such Auction Agent has agreed to a later time or date, as promptly as
practicable thereafter).
2.6 Allocation of Taxable Income.
If any Trust delivers to its Auction Agent a notice in the form of
Exhibit I to the Auction Agency Agreement designating all or a portion of any
dividend on shares of any series of Preferred Shares of such Trust to consist of
net capital gains or other income taxable for Federal income tax purposes, and
BD is a Broker-Dealer for such series, such Auction Agent shall deliver such
notice to BD on the Business Day following its receipt of such notice from such
Trust. On or prior to the Auction Date referred to in such notice, BD will
contact each of its customers that is a Beneficial Owner of shares of such
series of Preferred Shares or a Potential Beneficial Owner of shares of such
series of Preferred Shares interested in submitting an Order in the Auction to
be held on such Auction Date, and BD will notify such Beneficial Owners and
Potential Beneficial Owners of the contents of such notice. BD will be deemed to
have notified such Beneficial Owners and Potential Beneficial Owners if, for
each of them, (i) BD makes a reasonable effort to contact such Beneficial Owner
or Potential Beneficial Owner by telephone, and (ii) upon failing to contact
such Beneficial Owner or Potential Beneficial Owner by Telephone BD mails
written notification to such Beneficial Owner or Potential Beneficial Owner at
the mailing address indicated in the account records of BD.
The Auction Agent for any series of Preferred Shares shall be required
to notify BD if it is a Broker-Dealer for such series within two Business Days
after each Auction of such series of the Auction Agent's receipt of notice from
the Trust that such Auction involves an allocation of income taxable for Federal
income tax purposes as to the dollar amount per share of such taxable income and
income exempt from Federal income taxation included in the related dividend.
2.7 Failure to Deposit.
(a) If: (i) any Failure to Deposit shall have occurred with
respect to shares of any series of Preferred Shares of any Trust during any Rate
Period thereof (other than any Special Rate Period of Rate Period Days or any
Rate Period succeeding any Special Rate
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Period of more than 364 Rate Period Days during which a Failure to deposit
occurred that has not been cured), but, prior to 12:00 Noon, New York City time,
on the third Business Day next succeeding that date on which such accordance
with Section 2.8 of the Auction Agency Agreement and such Trust shall have paid
to the Auction Agent for such series the applicable Late Charge as described in
Section 2.8 of the Auction Agency Agreement, then, if BD is a Broker-Dealer for
such series, such Auction Agent shall deliver a notice in the form of Exhibit G
to the Auction Agency Agreement by first-class mail, postage prepaid, to BD not
later than one Business Day after its receipt of the payment from such Trust
curing such Failure to Deposit and such Late Charge.
(b) If: (i) any Failure to Deposit shall have occurred with
respect to shares of any series of Preferred Shares of any Trust during any Rate
Period thereof (other than any Special Rate Period of more than 364 Rate Period
Days or any Rate Period succeeding any Special Rate Period of more than 364 Rate
Period Days during which a Failure to Deposit occurred but has not been cured),
and, prior to 12:00 Noon, New York City time, 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 as described in Section 2.8 of the Auction
Agency Agreement or such Trust shall not have paid to the Auction Agent for such
series the applicable Late Charge described in Section 2.8 of the Auction Agency
Agreement; or (ii) any Failure to Deposit shall have occurred with respect to
shares of any series of Preferred Shares of any Trust during a Special Rate
Period thereof of more than 364 Rate Period Days, or during any Rate Period
thereof succeeding any Special Rate Period 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, New York City time, on the fourth Business Day preceding the
Auction Date for the Rate Period subsequent to such Rate Period, such Failure to
Deposit shall not have been cured as described in Section 2.8 of the Auction
Agency Agreement of such Trust shall not have paid to the Auction Agent for such
series the applicable Late Charge described in Section 2.8 of the Auction Agency
Agreement; then such Auction Agent shall deliver a notice in the form of Exhibit
H to the Auction Agency Agreement to the Broker-Dealers for such series not
later than one Business Day after the receipt of the payment from such Trust
curing such Failure to Deposit and Late Charge.
2.8 Service Charge to Be Paid to BD.
(a) No later than 12:00 noon on each Auction Date, the Auction
Agent after each Auction will pay a service charge from funds provided by the
Trust to each Broker-Dealer on the basis of the purchase price of Preferred
Shares placed by such Broker-Dealer at such Auction. The service charge shall be
(i) in the case of any Auction Date immediately preceding a seven-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 365, times (B) 1/4 of 1%, times (C) $25,000 times (D) the sum of the
aggregate number of shares of outstanding Preferred Shares for which the Auction
is conducted and (ii) in the case of any Special Dividend Period the amount
determined by mutual consent of the Fund and any such Broker-Dealers and shall
be based upon a selling concession that would be applicable to an underwriting
of fixed or variable rate Preferred Shares with a similar final maturity or
variable rate dividend period, respectively, at the commencement of the Dividend
Period with respect to such Auction.
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(b) If the Trust determines to change the rate at which the
Broker-Dealer Fee accrues, the Trust shall mail to the Auction Agent a notice
thereof within two Business Days of such change. Any change in the Broker-Dealer
Fee Rate shall be effective on the Auction Date next succeeding such change.
2.9 Settlement.
(a) If any Existing Holder selling Preferred Shares in an Auction
fails to deliver such Preferred Shares (by authorized book-entry), the BD of any
Person that was to have purchased Preferred Shares in such Auction may deliver
to such Person a number of Shares of Preferred Shares that is less than the
number of Shares of Preferred Shares that otherwise were to be purchased by such
Person. In such event, the number of Shares of Preferred Shares to be so
delivered shall be determined by BD. Delivery of such lesser number of Shares
shall constitute good delivery. Upon the occurrence of any such failure to
deliver Shares, BD shall deliver to the Auction Agent the notice required by
Section 2.3(h)(ii) hereof. Notwithstanding the foregoing provisions of this
Section 2.6(a), any delivery or non delivery of Preferred Shares which
represents any departure from the results of an Auction, as determined by the
Auction Agent, shall be of no effect unless and until the Auction Agent shall
have been notified of such delivery or non-delivery in accordance with the terms
of Section 2.3(h)(ii) hereof. The Auction Agent shall have no duty or liability
with respect to enforcement of this Section 2.6(a).
(b) Neither the Auction Agent nor the Trust shall have any
responsibility or liability with respect to the failure of an Existing Holder, a
Potential Holder or an Agent Member or any of them to deliver Preferred Shares
or to pay for Preferred Shares sold or purchased pursuant to the Auction
Procedures or otherwise.
(c) Notwithstanding any provision of the Auction Procedures or
the Settlement Procedures to the contrary, in the event BD is an Existing Holder
with respect to shares of a series of Preferred Shares and the Auction
procedures provide that BD shall be deemed to have submitted a Sell Order in an
Auction with respect to such shares if BD fails to submit an Order in that
Auction with respect to such shares, BD shall have no liability to any Person
for failing to sell such shares pursuant to such a deemed Sell Order if (i) such
shares were transferred by the beneficial owner thereof without notification of
such transfer in compliance with the Auction Procedures or (ii) BD has indicated
to the Auction Agent pursuant to Section 2.2(f) of this Agreement that,
according to BD's records, BD is not the Existing Holder of such shares.
(d) Notwithstanding any provision of the Auction Procedures or
the Settlement Procedures to the contrary, in the event an Existing Holder or
Beneficial Owner of shares of a series of Preferred Shares with respect to whom
a Broker-Dealer submitted a Bid to the Auction Agent for such shares that was
accepted in whole or in part, or submitted or is deemed to have submitted a Sell
Order for such shares that was accepted in whole or in part, fails to instruct
its Agent Member to deliver such shares against payment therefore, partial
deliveries of Preferred Shares that have been made in respect of Potential
Holders' or Potential Beneficial Owners' Submitted Bids for shares of such
series that have been accepted in whole or in part shall constitute good
delivery to such Potential Holders and Potential Beneficial Owners.
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3. The Auction Agent
3.1 Duties and Responsibilities.
(a) The Auction Agent is acting solely as agent for the Trust
hereunder and owes no duties, fiduciary or otherwise, to any other Person.
(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, the Auction Agent
Agreement, Auction Procedures or the Settlement Procedures against the Auction
Agent.
(c) In the absence of bad faith or negligence on its part, the
Auction Agent shall not be liable for any action taken, suffered, or omitted or
for any error of judgment made by it in the performance of its duties under this
Agreement. The Auction Agent shall not be liable for any error resulting from
the use or reliance on a source of information used in good faith and without
negligence to make any determination, calculation or declaration hereunder. The
Auction Agent shall not be liable for any error of judgment made in good faith
unless the Auction Agent shall have been negligent in ascertaining or failing to
ascertain the pertinent facts. In no event shall the Auction Agent be liable for
special, punitive, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Auction
Agent has been advised of the likelihood of such loss or damage and regardless
of the form of action.
(d) The Auction Agent shall not be: (i) required to, and does
not, make any representations or have any responsibilities as to the validity,
accuracy, value or genuineness of any signatures or endorsements, other than its
own; (ii) obligated to take any legal action hereunder that might, in its
judgment, involve any expense or liability, unless it has been furnished with
indemnity satisfactory to the Auction Agent; and (iii) responsible for or liable
in any respect on account of the identity, Trust or rights of any Person (other
than itself and its agents and attorneys) executing or delivering or purporting
to execute or deliver any document under this Agreement or any Broker-Dealer
Agreement.
(e) 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; 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.
3.2 Rights of the Auction Agent.
(a) The Auction Agent may conclusively rely and shall be fully
protected in acting or refraining from acting upon any communication authorized
by this Agreement and upon any written instruction, notice, request, direction,
consent, report, certificate, share certificate or other instrument, paper or
document believed by it to be genuine. The Auction Agent shall not be liable for
acting upon any communication authorized by this Agreement (including, but not
limited to, any made by telephone, telecopier or other means of electronic
communication acceptable to the parties hereto) which the Auction Agent believes
in
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good faith to have been given by the Trust or by BD. The Auction Agent may
record telephone communications with BD.
(b) The Auction Agent may consult with counsel of its own choice,
and the advice of such counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon.
(c) The Auction Agent shall not be required to advance, expend or
risk its own funds or otherwise incur or become exposed to financial liability
in the performance of its duties hereunder.
(d) The Auction Agent may perform its duties and exercise its
rights hereunder either directly or by or through agents or attorneys and shall
not be responsible for any misconduct or negligence on the part of any agent or
attorney appointed by it with due care.
3.3 Auction Agent's Disclaimer. The Auction Agent makes no
representation as to, and shall have no liability with respect to, the
correctness of the recitals in, or the validity, adequacy or accuracy of, this
Agreement, the Auction Agent Agreement, the Auction Procedures, any Purchaser's
Letter, the offering material used in connection with the offer and sale of the
Preferred Shares or any other agreement or instrument executed in connection
with the transactions contemplated herein or in any thereof.
4. Miscellaneous
4.1 Termination. (a) Any party may terminate this Agreement at any
time upon five (5) days written notice to the other parties, which notice may be
given by facsimile as provided in Section 4.4 hereof. This Agreement shall
automatically terminate upon the redemption of all outstanding Preferred Shares
or upon termination of the Auction Agent Agreement.
(b) BD represents that it (or if BD does not act as Agent Member,
one of its affiliates) shall make all dividend payments on the Preferred Shares
available in same-day funds on each Dividend Payment Date to customers that use
BD or affiliate as Agent Member.
4.2 Agent Member. BD is, and shall remain for the term of this
Agreement, a member of, or participant in, the Securities Depository (or an
affiliate of such a member or participant).
4.3 Communications. Except for (i) communications authorized to be by
telephone pursuant to this Agreement or the Auction Procedures and (ii)
communications in connection with the Auctions (other than those expressly
required to be in writing), all notices, requests and other communications to
any party hereunder shall be in writing (for the purposes of this Agreement,
telecopy or other means of electronic communication acceptable to the parties
shall be deemed to be in writing) and shall be given to such party, addressed to
it, at its address, telecopy number set forth below and, where appropriate
reference the particular Auction to which such notice relates:
11
If to BD, _________________________
addressed: _________________________
_________________________
_________________________
Attention: _____________
Telephone No.: __________
Facsimile No.: __________
If to the Auction The Bank of New York
Agent, addressed: Corporate Trust Administration
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ - ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Dealing and Trading Group - Auction Desk
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Trust, The BlackRock [State] Municipal Income Trust
addressed: c/o BlackRock Advisors, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: _______________
Telephone No.: ___________
Facsimile No.: ___________
or such other address or facsimile number as such party may hereafter specify
for such purpose by notice to the other parties. Each such notice, request or
communication shall be effective when delivered at the address specified herein.
Communications shall be given on behalf of BD by a BD Officer, on behalf of the
Auction Agent by an Authorized Officer and on behalf of the Trust by an
Authorized Trust Officer. Telephone communications may be recorded.
4.4 Entire Agreement. This Agreement contains the entire agreement
between the parties relating to the subject matter hereof, and there are no
other representations, endorsements, promises, agreements or understandings,
oral, written or inferred, between the parties relating to the subject matter
hereof.
4.5 Benefits. Nothing in this Agreement, express or implied, shall
give to any person, other than the Auction Agent, the Trust and BD and their
respective successors and permitted assigns, any benefit of any legal or
equitable right, remedy or claim under this Agreement.
4.6 Amendment; Waiver.
(a) This Agreement shall not be deemed or construed to be
modified, amended, rescinded, cancelled or waived, in whole or in part, except
by a written instrument signed by a duly authorized representative of each of
the parties hereto.
12
(b) Failure of any party to this Agreement to exercise any right
or remedy hereunder in the event of a breach of this Agreement by any other
party shall not constitute a waiver of any such right or remedy with respect to
any subsequent breach.
4.7 Successors and Assigns. This Agreement shall be binding upon,
inure to the benefit of, and be enforceable by, the respective successors and
permitted assigns of each of the parties hereto. This Agreement may not be
assigned by any party hereto absent the prior written consent of the other
parties.
4.8 Severability. If any clause, provision or section of this
Agreement shall be ruled invalid or unenforceable by any court of competent
jurisdiction, the invalidity or unenforceability of such clause, provision or
section shall not affect any remaining clause, provision or section hereof.
4.9 Execution in Counterparts. This Agreement may be executed in
several counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
4.10 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO
ANY PROVISIONS THEREOF RELATING TO CONFLICTS OF LAW, OTHER THAN SECTION 5-1401
OF THE GENERAL OBLIGATIONS LAW OF NEW YORK).
13
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 BANK OF NEW YORK,
as Auction Agent
By:
------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.
By:
------------------------------
Name:
Title:
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
as Broker-Dealer
By:
------------------------------
Name:
Title:
14
Exhibit A
To BROKER-DEALER
AGREEMENT
AUCTION BID FORM
(Submit only one Order on this Order Form)
BLACKROCK [STATE] MUNICIPAL INCOME FUND
Municipal Auction Rate Cumulative Preferred Shares ("PREFERRED SHARES")
To: The Bank of New York Date of Auction ____________________
Corporate Trust Administration Series of PREFERRED SHARES (indicate
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇- ▇▇▇ ▇▇▇▇▇ by Number Designation)
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ _______
Attention: Dealing and Trading Group
The undersigned Broker-Dealer submits the following Order on behalf of the
Bidder listed below:
Name of Bidder: __________________________________
Bidder placed the Order listed below covering the number of Shares
indicated (complete only one blank):
_________________ number of Shares of Preferred Shares now held by
Bidder (an Existing Holder), and the Order is a (check one):
[_] Hold Order; or
[_] Bid at a rate of ____%; or
[_] Sell Order;
-- or -
_________________ number of Shares of Preferred Shares not now held
by Bidder (a Potential Holder), and the Order is
a Bid at a rate of ______%
Notes:
(1) If submitting more than one Bid for one Bidder, use additional Order Forms.
(2) If one or more Bids covering in the aggregate more than the outstanding
number of Shares of the Preferred Shares held by any Existing Holder are
submitted, such Bids shall be considered valid in the order of priority set
forth in the Auction Procedures.
(3) A Hold or Sell Order may be placed only by an Existing Holder covering a
number of Shares of the Preferred Shares not greater than the number of
Shares currently held by such Existing Holder.
(4) Potential Holders may make Bids only, each of which must specify a rate.
If more than one Bid is submitted on behalf of any Potential Holder, each
Bid submitted shall be a separate Bid with the rate specified.
(5) Bids may contain no more than three figures to the right of the decimal
point (.001 of 1%).
(6) An Order must be submitted in whole Shares of Preferred Shares with an
aggregate liquidation preference of $25,000.
Name of Broker-Dealer: __________________________
By: __________________________
A-1
Exhibit B
To BROKER-DEALER
AGREEMENT
(To be used only for transfers made other than
pursuant to an Auction)
TRANSFER FORM
BLACKROCK [STATE] MUNICIPAL INCOME FUND
Municipal Auction Rate Cumulative Preferred Shares ("PREFERRED SHARES")
Series _____ Preferred Shares (indicate by
Number Designation)
We are (check one):
[_] the Existing Holder named below; or
[_] the Broker-Dealer for such Existing Holder; or
[_] the Agent Member for such Existing Holder.
We hereby notify you that such Existing Holder will transfer ___
Shares of PREFERRED SHARES to ____________________.
BLACKROCK [STATE]
MUNICIPAL INCOME FUND
By: _______________________________
Name:
Title:
(Name of Existing Holder)
(Name of Broker-Dealer)
(Name of Agent Member)
By: _______________________________
Name:
Title:
B-1
Exhibit C
To BROKER-DEALER
AGREEMENT
(To be used only for failures to deliver
PREFERRED SHARES sold pursuant to an Auction)
NOTICE OF A FAILURE TO DELIVER
BLACKROCK [STATE] MUNICIPAL INCOME FUND
Municipal Auction Rate Cumulative Preferred Shares ("Preferred Shares")
Series _____ Preferred Shares (indicate by
Number Designation)
Complete either I. or II.
I. We are a Broker-Dealer for ______________ (the "Purchaser"), which
purchased ____ Shares of Preferred Shares in the Auction held on
__________________ from the seller of such Preferred Shares.
II. We are a Broker-Dealer for _____________ (the "Seller"), which sold
____ Shares of Preferred Shares in the Auction held on
____________________ to the purchaser of such Preferred Shares.
We hereby notify you that (check one):
__________ the Seller failed to deliver such Preferred Shares to the
Purchaser; or
__________ the Purchaser failed to make payment to the Seller upon
delivery of such Preferred Shares.
Name:
-----------------------------
(Name of Broker-Dealer)
By:
-------------------------------
Printed Name:
Title:
C-1
Capitalized terms used in this letter, unless otherwise defined herein,
shall have the meanings set forth in the Offering Documents.
(Name of Purchaser)
By:
--------------------------------
Name:
Title:
Address:
---------------------------
-----------------------------------
-----------------------------------
Dated:
S-1