Exhibit K(2)
FORM OF
BLACKROCK STRATEGIC MUNICIPAL AUCTION AGENCY AGREEMENT
Basic Terms for Acting as Auction Agent
[ ], 1999
These basic terms ("Basic Terms") set forth the general terms
and conditions pursuant to which a bank or trust company identified in a Request
and Acceptance Letter will act as auction agent (an "Auction Agent") for
Municipal Auction Rate Cumulative Preferred Shares ("Preferred Shares") issued
by The BlackRock Pennsylvania Strategic Municipal Trust and by The BlackRock
Strategic Municipal Trust, each an investment company registered under the
Investment Company Act of 1940, as amended (each a "Trust"), for which BlackRock
Advisors, Inc. is the investment adviser.
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The Trust proposes to issue Preferred Shares pursuant to its
Agreement and Declaration of Trust, as amended or supplemented by the Statement
(as defined below). The Trust desires that the Auction Agent perform certain
duties in connection with the Preferred Shares upon the terms and subject to the
conditions hereof.
1. Definitions and Rules of Construction.
1.1 Terms Defined By Reference to Statement.
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 Depository 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 adoption 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) "Broker-Dealer Agreement" shall mean each agreement among the
Trust, the Auction Agent and a Broker-Dealer substantially in the form attached
hereto as Exhibit A.
(g) "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.
(h) "Request and Acceptance Letter" shall mean the letter from
the Trust to the Auction Agent pursuant to which the Trust appoints the Auction
Agent and the Auction Agent accepts its appointment as auction agent for the
Preferred Shares.
(i) "Settlement Procedures" shall mean the Settlement Procedures
attached hereto as Exhibit B.
(j) "Statement" shall mean the Statement of Preferences of
Municipal Auction Rate Cumulative Preferred Shares, as adopted by the Trust, a
copy of which is attached to the Request and Acceptance Letter, as the same may
be amended, supplemented or modified from time to time.
(k) "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.
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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 the 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 the Agreement nor shall they
affect its meaning, construction or effect.
(c) The words "hereof", "herein", "hereto" and other words of
similar import refer to the Agreement as a whole.
(d) All references herein to a particular time of day shall be to
New York City time.
(e) Sections 1 and 2 hereof shall be read in conjunction with the
Statement and in the event of any conflict with the Statement the Statement
shall take precedent.
2. The Auction.
2.1 Purpose; Incorporation by Reference of Auction Procedures and
Settlement Procedures.
(a) The Statement for each series of Preferred Shares will
provide that the Applicable Rate for such series for each Subsequent Rate Period
thereof shall, except under certain conditions, be the rate per annum that a
bank or trust company appointed by the Trust advises results from implementation
of the Auction Procedures for such series. The Board of Trustees of the Trust or
a committee thereof has adopted a resolution appointing the Auction Agent as
auction agent for purposes of the Auction Procedures for each series of
Preferred Shares. The Auction Agent accepts such appointment and agrees to
follow the procedures set forth in this Section 2 and the Auction Procedures for
the purpose of determining the Applicable Rate for each series of Preferred
Shares for each Subsequent Rate Period thereof for which the Applicable Rate is
to be determined by an Auction. Each periodic implementation of such procedures
is hereinafter referred to as an "Auction."
(b) All of the provisions contained in the Auction Procedures and
the Settlement Procedures are incorporated herein by reference in their entirety
and shall be deemed to be a part hereof to the same extent as if such provisions
were fully set forth herein.
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2.2 Preparation for Each Auction; Maintenance of Registry of Beneficial
Owners.
(a) Not later than seven days prior to the first Auction Date for the
first series of Preferred Shares subject to an Auction, the Trust shall provide
the Auction Agent with a list of the Broker-Dealers. Not later than seven days
prior to any Auction Date for any series of Preferred Shares for which any
change in such list of Broker-Dealers is to be effective, the Trust will notify
the Auction Agent in writing of such change and, if any such change involves the
addition of a Broker-Dealer to such list, shall cause to be delivered to the
Auction Agent for execution by the Auction Agent a Broker-Dealer Agreement
signed by such Broker-Dealer; provided, however, that if the Trust proposes to
designate any Special Rate Period of any series of Preferred Shares pursuant to
Section 4 of Part I of the Statement, not later than 11:00 A.M. on the Business
Day next preceding the Auction next preceding the first day of such Rate Period
or by such later time or date, or both, as may be agreed to by the Auction
Agent, the Trust shall provide the Auction Agent with a list of the
Broker-Dealers for such series and a manually signed copy of each Broker-Dealer
Agreement or a new Schedule A to a Broker-Dealer Agreement (which Schedule A
shall replace and supersede any previous Schedule A to such Broker-Dealer
Agreement) with each Broker-Dealer for such series. The Auction Agent and the
Trust shall have entered into a Broker-Dealer Agreement with each Broker-Dealer
prior to the participation of any such Broker-Dealer in any Auction.
(b) In the event that any Auction Date for any series of Preferred
Shares shall be changed after the Auction Agent shall have given the notice
referred to in clause (vi) of paragraph (a) of the Settlement Procedures, or
after the notice referred to in Section 2.5(a) hereof, if applicable, the
Auction Agent, by such means as the Auction Agent deems practicable, shall give
notice of such change to the Broker-Dealers for such series not later than the
earlier of 9:15 A.M. on the new Auction Date or 9:15 A.M. on the old Auction
Date.
(c) (i) The Auction Agent shall maintain a registry of the beneficial
owners of the Preferred Shares of each series who shall constitute Existing
Holders of Preferred Shares of such series for purposes of Auctions and shall
indicate thereon the identity of the respective Broker-Dealer of each Existing
Holder, if any, on whose behalf such Broker-Dealer submitted the most recent
Order in any Auction which resulted in such Existing Holder continuing to hold
or purchasing Preferred Shares of such series. The Auction Agent shall keep such
registry current and accurate. The Trust shall provide or cause to be provided
to the Auction Agent at or prior to the Date of Original Issue of the Preferred
Shares of each series a list of the
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initial Existing Holders of the shares of each such series of Preferred Shares,
the number of shares purchased by each such Existing Holder and the respective
Broker-Dealer of each such Existing Holder or the affiliate thereof through
which each such Existing Holder purchased such shares. The Auction Agent shall
advise the Trust in writing whenever the number of Existing Holders is 500 or
more. The Auction Agent may rely upon, as conclusive evidence of the identities
of the Existing Holders of Preferred Shares of any series (A) such list, (B) the
results of Auctions, (C) notices from any Broker-Dealer as described in the
first sentence of Section 2.2(c)(iii) hereof and (D) the results of any
procedures approved by the Trust that have been devised for the purpose of
determining the identities of Existing Holders in situations where Preferred
Shares may have been transferred without compliance with any restriction on the
transfer thereof set forth in the Auction Procedures.
(ii) In the event of any partial redemption of any series of
Preferred Shares, the Auction Agent shall, at least two Business Days prior to
the next Auction for such series, request each Broker-Dealer to provide the
Auction Agent with a list of Persons who such Broker-Dealer believes should
remain Existing Holders after such redemption based upon inquiries of those
Persons such Broker-Dealer believes are Beneficial Owners as a result of the
most recent Auction and with respect to each such Person, the number of
Preferred Shares of such series such Broker-Dealer believes are owned by such
Person after such redemption. In the absence of receiving any such information
from any Broker-Dealer, the Auction Agent may continue to treat the Persons
listed in its registry of Existing Holders as the beneficial owner of the number
of Preferred Shares of such series shown in such registry.
(iii) The Auction Agent shall be required to register a transfer
of Preferred Shares of any series from an Existing Holder of such Preferred
Shares only if such transfer is to another Existing Holder, or other Person if
permitted by the Trust, and only if such transfer is made (A) pursuant to an
Auction, (B) the Auction Agent has been notified in writing (I) in a notice
substantially in the form of Exhibit C to the Broker-Dealer Agreements by a
Broker-Dealer of such transfer or (II) in a notice substantially in the form of
Exhibit D to the Broker-Dealer Agreements by the Broker-Dealer of any Existing
Holder, or other Person if permitted by the Trust, that purchased or sold such
Preferred Shares in an Auction of the failure of such Preferred Shares to be
transferred as a result of such Auction or (C) pursuant to procedures approved
by the Trust that have been devised for the purpose of determining the
identities of Existing Holders in situations where Preferred Shares may have
been transferred without compliance with any restriction on the transfer thereof
set forth in the Auction Procedures. The Auction Agent is not
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required to accept any such notice for an Auction unless it is received by the
Auction Agent by 3:00 P.M. on the Business Day preceding such Auction.
(d) The Auction Agent may request the Broker-Dealers, as set forth in
the Broker-Dealer Agreements, to provide the Auction Agent with a list of
Persons who such Broker-Dealer believes should be Existing Holders based upon
inquiries of those Persons such Broker-Dealer believes are Beneficial Owners as
a result of the most recent Auction and with respect to each such Person, the
number of shares of such series of Preferred Shares such Broker-Dealer believes
to be owned by such Person. The Auction Agent shall keep confidential such
registry of Existing Holders and shall not disclose the identities of the
Existing Holders of such Preferred Shares to any Person other than the Trust and
the Broker-Dealer that provided such information.
2.3 Information Concerning Rates.
(a) The Rate Multiple on the date of the Agreement is set forth in the
Request and Acceptance Letter. If there is any change in the credit rating of
Preferred Shares by the rating agency (or substitute or successor rating
agencies) referred to in the definition of "Rate Multiple" resulting in any
change in the Rate Multiple for Preferred Shares after the date of the Request
and Acceptance Letter, the Trust shall notify the Auction Agent in writing of
such change in the Rate Multiple prior to 12:00 Noon on the Business Day prior
to the next Auction Date for any series of Preferred Shares succeeding such
change. If the Trust designates all or a portion of any dividend on shares of
any series of Preferred Shares to consist of net capital gains or other income
taxable for Federal income tax purposes, it may indicate, in a notice in the
form of Exhibit I hereto to the Auction Agent pursuant to Section 2.6 hereof,
the Rate Multiple for such series to be in effect for the Auction Date on which
the dividend rate for such dividend is to be fixed. In determining the Maximum
Rate for any series of Preferred Shares on any Auction Date as set forth in
Section 2.3(b)(i) hereof, the Auction Agent shall be entitled to rely on the
last Rate Multiple for Preferred Shares of which it has most recently received
notice from the Trust (or, in the absence of such notice, the percentage
determined by reference to the definition of Rate Multiple), except that if the
Trust shall have notified the Auction Agent of a Rate Multiple to be in effect
for an Auction Date in accordance with the preceding sentence, the Rate Multiple
in effect for the next succeeding Auction Date of any series of Preferred Shares
shall be, unless the Trust notifies the Auction Agent of a change in the Rate
Multiple for such succeeding Auction Date pursuant to this Section 2.3(a), the
Rate Multiple that was in effect on the first preceding Auction Date for
Preferred Shares with respect to which the dividend, the rate for which was
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fixed on such Auction Date, did not include any net capital gain or other
income taxable for Federal income tax purposes.
(i) On each Auction Date for any series of Preferred Shares, the
Auction Agent shall determine the Maximum Rate for such series. The Maximum
Rate for any series of Preferred Shares on any Auction Date shall be:
(A) in the case of any Auction Date which is not the Auction Date
immediately prior to the first day of any proposed Special Rate Period
designated by the Trust pursuant to Section 4 of Part I of the Statement, the
product of (1) the Reference Rate on such Auction Date for the next Rate Period
of such series and (2) the Rate Multiple on such Auction Date, unless such
series has or had a Special Rate Period (other than a Special Rate Period of 28
Rate Period Days or fewer) and an Auction at which Sufficient Clearing Bids
existed has not yet occurred for a Minimum Rate Period of such series after such
Special Rate Period, in which case the higher of:
(1) the dividend rate on shares of such series for the
then-ending Rate Period; and
(2) the product of (x) the higher of (I) the Reference Rate on
such Auction Date for a Rate Period equal in length to the
then-ending Rate Period of such series, if such then ending
Rate Period was 364 Rate Period Days or fewer, or the
Treasury Note Rate on such Auction Date for a Rate Period
equal in length to the then-ending Rate Period of such
series, if such then ending Rate Period was more than 364
Rate Period Days, and (II) the Reference Rate on such
Auction Date for a Rate Period equal in length to such
Special Rate Period of such series, if such Special Rate
Period was 364 Rate Period Days or fewer, or the Treasury
Note Rate on such Auction Date for a Rate Period equal in
length to such Special Rate Period, if such Special Rate
Period was more than 364 Rate Period Days and (y) the Rate
Multiple on such Auction Date; or
(B) in the case of any Auction Date which is the Auction Date
immediately prior to the first day of any proposed Special Rate Period
designated by
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the Trust pursuant to Section 4 of Part I of the Statement, the product of (1)
the highest of (x) the Reference Rate on such Auction Date for a Rate-Period
equal in length to the then-ending Rate Period of such series, if such
then-ending Rate Period was 364 Rate Period Days or fewer, or the Treasury Note
Rate on such Auction Date for a Rate Period equal in length to the then-ending
Rate Period of such Rate Period, if such then-ending Rate Period was more than
364 Rate Period Days, (y) the Reference Rate on such Auction Date for the
Special Rate Period for which the Auction is being held if such Special Rate
Period is 364 Rate Period Days or fewer or the Treasury Note Rate on such
Auction Date for the Special Rate Period for which the Auction is being held if
such Special Rate Period is more than 364 Rate Period Days, and (z) the
Reference Rate on such Auction Date for Minimum Rate Periods and (2) the Rate
Multiple on such Auction Date.
Not later than 9:30 A.M. on each Auction Date the Auction Agent shall notify the
Trust and the Broker-Dealers of the Maximum Rate so determined and the "AA"
Composite Commercial Paper Rate(s), the Taxable Equivalent of the Short-Term
Municipal Bond Rate(s), Treasury Note Rate(s) and Treasury ▇▇▇▇ Rate(s), as the
case may be, used to make such determination.
(ii) From and after a Failure to Deposit by the Trust during any
Rate Period of any series of Preferred Shares, until such failure is cured
and a Late Charge (as defined in paragraph (a) of Section 2.7), is paid, in
accordance with subparagraph (e)(i) of Section 2 of Part I of the
Statement, on the first day of each Rate Period of such series the Auction
Agent shall determine the Treasury Note Rate for such Rate Period of more
than 364 Rate Period Days and the Reference Rate for Rate Periods of 364
Rate Period Days or fewer. Not later than 9:30 A.M. on each such first day,
the Auction Agent shall notify the Trust of the applicable Reference Rate
and Treasury Note Rate.
(iii) If any "AA" Composite Commercial Paper Rate, Taxable
Equivalent of the Short-Term Municipal Bond Rate, Treasury Note Rate or
Treasury ▇▇▇▇ Rate, as the case may be, is not quoted on an interest or
bond equivalent, as the case may be, basis, the Auction Agent shall convert
the quoted rate to the interest or bond equivalent thereof as set forth in
the definition of such rate in the Statement if the rate obtained by the
Auction Agent is quoted on a discount basis, or if such rate is quoted on a
basis other than an interest or bond equivalent or discount basis the
Auction Agent shall
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convert the quoted rate to an interest or bond equivalent rate after
consultation with the Trust as to the method of such conversion.
(iv) If any "AA" Composite Commercial Paper Rate is to be based
on rates supplied by Commercial Paper Dealers and one or more of the
Commercial Paper Dealers shall not provide a quotation for the
determination of such "AA" Composite Commercial Paper Rate, the Auction
Agent shall immediately notify the Trust so that the Trust can determine
whether to select a Substitute Commercial Paper Dealer or Substitute
Commercial Paper Dealers to provide the quotation or quotations not being
supplied by any Commercial Paper Dealer or Commercial Paper Dealers. The
Trust shall promptly advise the Auction Agent of any such selection.
(v) If any Treasury Note Rate or Treasury ▇▇▇▇ Rate is to be
based on rates supplied by U.S. Government Securities Dealers and one or
more of the U.S. Government Securities Dealers shall not provide a
quotation for the determination of such Treasury Rate, the Auction Agent
shall immediately notify the Trust so that the Trust can determine whether
to select a Substitute U.S. Government Securities Dealer or Substitute U.S.
Government Securities Dealers to provide the quotation or quotations not
being supplied by any U.S. Government Securities Dealer or U.S. Government
Securities Dealers. The Trust shall promptly advise the Auction Agent of
any such selection.
(c) The maximum marginal tax rate referred to in the definition of
"Rate Multiple" in the Statement is referred to in this Agreement as the
"Highest Marginal Rate." The Highest Marginal Rate on the date of the Agreement
is set forth in the Request and Acceptance Letter. If there is any change in the
Highest Marginal Rate, the Trust shall notify the Auction Agent in writing of
such change prior to 12:00 Noon on the Business Day prior to the next Auction
Date for Preferred Shares succeeding such change. In determining the Maximum
Rate for any series of Preferred Shares on any Auction Date, the Auction Agent
shall be entitled to rely on the Highest Marginal Rate of which it has most
recently received notice from the Trust (or, in the absence of such notice, the
percentage set forth in the Request and Acceptance Letter).
2.4 Auction Schedule.
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The Auction Agent shall conduct Auctions in accordance with the schedule
set forth below. Such schedule may be changed by the Auction Agent with the
consent of the Trust, which consent shall not be unreasonably withheld. The
Auction Agent shall give written notice of any such change to each
Broker-Dealer. Such notice shall be given prior to the close of business on the
Business Day next preceding the first Auction Date on which any such change
shall be effective.
Time Event
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By 9:30 A.M. Auction Agent advises the Trust and
Broker-Dealers of the applicable Maximum Rate
and the Reference Rate(s) and Treasury Note
Rate(s), as the case may be, used in determining
such Maximum Rate as set forth in Section
2.3(b)(i) hereof.
9:30 A.M. - 1:30 P.M. Auction Agent assembles information communicated
to it by Broker-Dealers as provided in Section
2(a) of the Auction Procedures. Submission
Deadline is 1:30 P.M.
Not earlier than 1:30 P.M. Auction Agent makes determinations pursuant to
Section 3(a) of the Auction Procedures.
By approximately 3:00 P.M. Auction Agent advises Trust of results of
Auction as provided in Section 3(b) of the
Auction Procedures.
Submitted Bids and Submitted Sell Orders are
accepted and rejected and Preferred Shares
allocated as provided in Section 4 of the
Auction Procedures. Auction Agent gives notice
of Auction results as set forth in paragraph(a)
of the Settlement Procedures.
The Auction Agent shall follow the notification procedures set forth in
paragraph (a) of the Settlement Procedures.
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2.5 Designation of Special Rate Period.
(a) The Statement will provide that, subject to the Trust's option to
designate a Special Rate Period as referred to in paragraph (b) of this Section
2.5, (i) each Rate Period of any series of Preferred Shares will be a Minimum
Rate Period (a duration of seven days, subject to certain exceptions) and (ii)
each Rate Period following a Rate Period of any series of Preferred Shares that
is other than a Minimum Rate Period will be a Minimum Rate Period. Not less than
10 nor more than 20 days prior to the last day of any such Rate Period that is
not a Minimum Rate Period, (i) the Trust shall deliver to the Auction Agent a
notice of the Auction Date of the next succeeding Auction for such series in the
form of Exhibit C hereto and (ii) the Auction Agent shall deliver such notice by
first-class mail, postage prepaid, to each Existing Holder of shares of such
series at the address set forth for such Existing Holder in the records of the
Auction Agent and to the Broker-Dealers for such series as promptly as
practicable after its receipt of such notice from the Trust.
(b) Pursuant to the Statement, the Trust may, at its option, designate
a Special Rate Period for any series of Preferred Shares in the manner described
in Section 4 of Part I of the Statement.
(i) If the Board of Trustees proposes to designate any succeeding
Subsequent Rate Period of any series of Preferred Shares as a Special Rate
Period, (A) the Trust shall deliver to the Auction Agent a notice of such
proposed Special Rate Period in the form of Exhibit D hereto not less than
20 (or such lesser number of days as may be agreed to from time to time by
the Auction Agent) nor more than 30 days prior to the first day of such
proposed Special Rate Period and (B) the Auction Agent on behalf of the
Trust shall deliver such notice by first-class mail, postage prepaid, to
each Existing Holder of shares of such series of Preferred Shares at the
address set forth for such Existing Holder in the records of the Auction
Agent and to the Broker-Dealers for such series as promptly as practicable
after its receipt of such notice from the Trust.
(ii) If the Board of Trustees determines to designate such
succeeding Subsequent Rate Period as a Special Rate Period, (A) the Trust
shall deliver to the Auction Agent a notice of such determination in the
form of Exhibit E hereto not later than 11:00 A.M. on the second Business
Day next preceding the first day
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of such proposed Special Rate Period (or such later time or date, or both,
as may be agreed to by the Auction Agent) and (B) the Auction Agent shall
deliver such notice to the Broker-Dealers for such series not later than
3:00 P.M. on such second Business Day (or, if the Auction Agent has agreed
to a later time or date, as promptly as practicable thereafter).
(iii) If the Trust shall deliver to the Auction Agent a notice
not later than 11:00 A.M. on the second Business Day next preceding the
first day of such proposed Special Rate Period (or such later time or date,
or both, as may be agreed to by the Auction Agent) stating that the 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
hereto, or shall fail to timely deliver either such notice or a notice in
the form of Exhibit E hereto, the Auction Agent shall deliver a notice in
the form of Exhibit F hereto to the Broker-Dealers for such series not
later than 3:00 P.M. on such second Business Day (or, if the Auction Agent
has agreed to a later time or date, as promptly as practicable thereafter).
Such change in the length of any Rate Period shall not occur if (1) an
Auction for shares of such series shall not be held on such Auction Date for any
reason or (2) an Auction for shares of such series shall be held on such Auction
Date but Sufficient Clearing Bids for shares of such series shall not exist in
such Auction.
2.6 Allocation of Taxable Income.
The Trust may designate all or a portion of any dividend on shares of
any series of Preferred Shares to consist of net capital gains or other income
taxable for Federal income tax purposes and may deliver to the Auction Agent a
notice in the form of Exhibit I hereto of such designation not later than the
Dividend Payment Date for such series next preceding the Auction Date on which
the dividend rate for such dividend is to be fixed. The Auction Agent will
deliver such notice, if given, to the Broker-Dealers for such series on the
Business Day following its receipt of such notice from the Trust. Within two
Business Days after any Auction Date involving the allocation of income taxable
for Federal income tax purposes for which notice has so been given by the Trust,
the Auction Agent shall notify each Broker-Dealer for the related series as to
the dollar
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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 Preferred Shares 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 that has not been cured), but, 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 have been cured in accordance with Section 2.7(c) hereof and the
Trust shall have paid to the Auction Agent a late charge (a "Late Charge")
equal to the sum of (1) if such Failure to Deposit consisted of the failure
timely to pay to the Auction Agent the full amount of dividends with
respect to any Dividend Period on such shares, an amount computed by
multiplying (x) 200% of the Reference Rate for the Rate Period during which
such Failure to Deposit occurs on the Dividend Payment Date for such
Dividend Period by (y) a fraction, the numerator of which shall be the
number of days for which such Failure to Deposit has not been cured in
accordance with Section 2.7(c) hereof (including the day such Failure to
Deposit occurs and excluding the day such Failure to Deposit is cured) and
the denominator of which shall be 360, and applying the rate obtained
against the aggregate liquidation preference of the outstanding Preferred
Shares and (2) if such Failure to Deposit consisted of the failure timely
to pay to the Auction Agent the Redemption Price of the Preferred Shares,
if any, for which Notice of Redemption has been given by the Trust, an
amount computed by multiplying (x) 200% of the Reference Rate for the Rate
Period during which such Failure to Deposit occurs on the redemption date
by (y) a fraction, the numerator of which shall be the number of days for
which such Failure to Deposit is not cured in accordance with Section
2.7(c) hereof (including the day such Failure to Deposit occurs and
excluding the day such Failure to Deposit is cured) and the denominator of
which shall be 360, and applying the rate obtained against the aggregate
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liquidation preference of the outstanding Preferred Shares to the redeemed,
then the Auction Agent shall deliver a notice in the form of Exhibit G hereto by
first-class mail, postage prepaid, to the Broker-Dealers for such series not
later than one Business Day after its receipt of the payment from the Trust
curing such Failure to Deposit and such Late Charge.
(b) If:
(i) any Failure to Deposit shall have occurred with respect to
Preferred Shares 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 in accordance with Section 2.7(c) hereof or the
Trust shall not have paid the applicable Late Charge to the Auction Agent;
or
(ii) any Failure to Deposit shall have occurred with respect to
Preferred Shares 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 in accordance with Section 2.7(c) hereof or the Trust shall
not have paid the applicable Late Charge to the Auction Agent in accordance
with Section 2(e)(i)(d) of the Statement (such Late Charge, for purposes of
this clause (b)(iii) of this Section 2.7, to be calculated by using, as the
Reference Rate, the Reference Rate applicable to a Rate Period (x)
consisting of more than 182 Rate Period Days and (y) commencing on the date
on which the Rate Period during which Failure to Deposit occurs commenced);
14
then the Auction Agent shall deliver a notice in the form of Exhibit H hereto to
the Broker-Dealers for such series not later than one Business Day after the
receipt of the payment from the Trust curing such Failure to Deposit and such
Late Charge.
(c) A Failure to Deposit with respect to Preferred Shares shall have
been cured (if such Failure to Deposit is not solely due to the willful failure
to the Trust to make the required payment to the Auction Agent) with respect to
any Rate Period if, within the respective time periods described immediately
above, the Trust shall have paid to the Auction Agent (i) all accumulated and
unpaid dividends on the Preferred Shares and (ii) without duplication, the
Redemption Price for the Preferred Shares, if any, for which Notice of
Redemption has been mailed; provided, however, that the foregoing clause (ii)
shall not apply to the Trust's failure to pay the Redemption Price in respect of
Preferred Shares when the related Redemption Notice provides that redemption of
such shares is subject to one or more conditions precedent and each such
condition precedent shall not have been satisfied at the time or times and in
the manner specified in such Notice of Redemption.
2.8 Broker-Dealers.
(a) Not later than 12:00 Noon on each Auction Date for any series of
Preferred Shares, the Trust shall pay to the Auction Agent an amount in cash
equal to the aggregate fees payable to the Broker-Dealers for such series
pursuant to Section 2.8 of the Broker-Dealer Agreements for such series. The
Auction Agent shall apply such moneys as set forth in Section 2.8 of each such
Broker-Dealer Agreement.
(b) The Trust shall obtain the consent of the Auction Agent prior to
selecting any Person to act as a Broker-Dealer, which consent shall not be
unreasonably withheld.
(c) The Auction Agent shall terminate any Broker-Dealer Agreement as
set forth therein if so directed by the Trust, provided that at least one
Broker-Dealer Agreement would be in effect for each series of Preferred Shares
after such termination.
(d) Subject to the Auction Agent's having consented to the selection
of the relevant Broker-Dealer pursuant to Section 2.8(b) hereof, the Auction
Agent shall from time to time enter into such Broker-Dealer Agreements with one
or more Broker-Dealers as the Trust shall request, and shall enter into such
schedules to any such Broker-Dealer Agreements as the Trust shall request, which
schedules,
15
among other things, shall set forth the series of Preferred Shares to which such
Broker-Dealer Agreement relates.
2.9 Ownership of Shares of Preferred Shares.
The Trust shall notify the Auction Agent if the Trust or any affiliate of
the Trust acquires any Preferred Shares of any series. Neither the Trust nor any
affiliate of the Trust shall submit any Order in any Auction for Preferred
Shares, except as set forth in the next sentence. Any Broker-Dealer that is an
affiliate of the Trust may submit Orders in Auctions, but only if such Orders
are not for its own account. For purposes of this Section 2.9, a Broker-Dealer
shall not be deemed to be an affiliate of the Trust solely because one or more
of the directors or executive officers of such Broker-Dealer or of any Person
controlled by, in control of or under common control with such Broker-Dealer is
also a director of the Trust. The Auction Agent shall have no duty or liability
with respect to enforcement of this Section 2.9.
2.10 Access to and Maintenance of Auction Records.
The Auction Agent shall, upon the receipt of prior written notice from the
Trust, afford to the Trust access at reasonable times during normal business
hours to all books, records, documents and other information concerning the
conduct and results of Auctions. The Auction Agent shall maintain records
relating to any Auction for a period of six years after such Auction, and such
records shall, in reasonable detail, accurately and fairly reflect the actions
taken by the Auction Agent hereunder.
3. The Auction Agent as Dividend and Redemption Price Disbursing Agent.
The Auction Agent, as dividend and redemption price disbursing agent, shall
pay to the Holders of Preferred Shares of any series (i) on each Dividend
Payment Date for such series, dividends on the Preferred Shares of such series,
(ii) on any date fixed for redemption of Preferred Shares of any series, the
Redemption Price of any shares of such series called for redemption and (iii)
any Late Charge related to any payment of dividends or Redemption Price, in each
case after receipt of the necessary funds from the Trust with which to pay such
dividends, Redemption Price or Late Charge. The amount of dividends for any Rate
Period for any series of Preferred Shares to be paid by the Auction Agent to the
Holders of such shares of such series will be determined by the Trust as set
forth in Section 2 of Part I of the Statement with respect to such series. The
Redemption Price of any shares to be paid by the Auction Agent to the Holders
will be determined by the Trust as set forth in Section 11 of Part I of the
Statement with respect to such series. The Trust shall
16
notify the Auction Agent in writing of a decision to redeem shares of any series
of Preferred Shares at least five days prior to the date a notice of redemption
is required to be mailed to the Holders of the shares to be redeemed by
paragraph (c) of Section 11 of Part I of the Statement. Such notice by the Trust
to the Auction Agent shall contain the information required by paragraph (c) of
Section 11 of Part I of the Statement to be stated in the notice of redemption
required to be mailed by the Trust to such Holders.
17
4. The Auction Agent as Transfer Agent and Registrar.
4.1 Issue of Shares Certificates.
Upon the Date of Original Issue of each series of Preferred Shares, one or
more certificates representing all of the shares of such series issued on such
date shall be issued by the Trust and, at the request of the Trust, registered
in the name of Cede & Co. and countersigned by the Auction Agent.
4.2 Registration of Transfer of Shares.
Shares of each series of Preferred Shares shall be registered solely in the
name of the Securities Depository or its nominee.
4.3 Removal of Legend on Restricted Shares.
All requests for removal of legends on Preferred Shares of any series
indicating restrictions on transfer shall be accompanied by an opinion of
counsel stating that such legends may be removed and such shares freely
transferred, such opinion to be delivered under cover of a letter from a Trust
Officer authorizing the Auction Agent to remove the legend on the basis of said
opinion.
4.4 Lost Certificates.
The Auction Agent shall issue and register replacement certificates for
certificates represented to have been lost, stolen or destroyed upon the
fulfillment of such requirements as shall be deemed appropriate by the Trust and
the Auction Agent, subject at all times to provisions of law, the By-Laws of the
Trust governing such matters and resolutions adopted by the Trust with respect
to lost securities. The Auction Agent may issue new certificates in exchange for
and upon the cancellation of mutilated certificates. Any request by the Trust to
the Auction Agent to issue a replacement or new certificate pursuant to this
Section 4.4 shall be deemed to be a representation and warranty by the Trust to
the Auction Agent that such issuance will comply with such provisions of law and
the By-Laws and resolutions of the Trust.
4.5 Disposition of Cancelled Certificates; Record Retention.
The Auction Agent shall retain all stock or share certificates which have
been cancelled in transfer or exchange and all accompanying documentation in
accordance with applicable rules and regulations of the Securities and Exchange
Commission for two calendar years. Upon the expiration of this two-year period,
the
18
Auction Agent shall deliver to the Trust the cancelled certificates and
accompanying documentation. The Trust shall also undertake to furnish to the
Securities and Exchange Commission and to the Board of Governors of the Federal
Reserve System, upon demand, at either the principal office or at any regional
office, complete, correct and current hard copies of any and all such records.
Thereafter such records shall not be destroyed by the Trust without the
concurrence of the Auction Agent.
4.6 Record Books.
For so long as the Auction Agent is acting as the transfer agent for any
series of Preferred Shares pursuant to the Agreement, it shall maintain a record
book containing a list of the Holders of the Preferred Shares of each such
series. In case of any request or demand for the inspection of the record books
of the Trust or any other books in the possession of the Auction Agent, the
Auction Agent will notify the Trust and secure instructions as to permitting or
refusing such inspection. The Auction Agent reserves the right, however, to
exhibit the record books or other books to any Person in case it is advised by
its counsel that its failure to do so would be unlawful.
4.7 Return of Funds.
Any funds deposited with the Auction Agent hereunder by the Trust for any
reason, including but not limited to redemption of Preferred Shares of any
series, that remain unpaid after ninety days shall be repaid to the Trust upon
the written request of the Trust, together with interest, if any, earned
thereon.
5. Representations and Warranties of the Trust.
The Trust represents and warrants to the Auction Agent that:
(a) the Trust is duly organized and existing business trust in good
standing under the laws of the State of its organization and has all
requisite power to execute and deliver the Agreement and to authorize, create
and issue the Preferred Shares of each series, and the Preferred Shares of each
series when issued, will be duly authorized, validly issued, fully paid and
nonassessable;
(b) the Agreement has been duly and validly authorized, executed and
delivered by the Trust and constitutes the legal, valid and binding obligation
of the Trust;
19
(c) the form of the certificate evidencing the Preferred Shares of
each series complies or will comply with all applicable laws of the State of its
organization;
(d) when issued, the Preferred Shares of each series will have been
duly registered under the Securities Act of 1933, as amended, and no further
action by or before any governmental body or authority of the United States or
of any state thereof is required in connection with the execution and delivery
of the Agreement or will have been required in connection with the issuance of
Preferred Shares of each series;
(e) the execution and delivery of the Agreement and the issuance and
delivery of the Preferred Shares of each series 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 Agreement and Declaration of Trust (as
amended by one or more Statements) or the By-Laws of the Trust, any law or
regulation, any order or decree of any court or public authority having
jurisdiction, or any mortgage, indenture, contract, agreement or undertaking to
which the Trust is a party or by which it is bound the effect of which conflict,
violation, default or breach would be material to the Trust or the Trust and its
subsidiaries taken as a whole; and
(f) no taxes are payable upon or in respect of the execution of the
Agreement or the issuance of the Preferred Shares of any series.
20
6. The Auction Agent.
6.1 Duties and Responsibilities.
(a) The Auction Agent is acting solely as agent for the Trust
hereunder and owes no fiduciary duties to any Person, other than the Trust, by
reason of the Agreement.
(b) The Auction Agent undertakes to perform such duties and only such
duties as are specifically set forth in the Agreement, and no implied covenants
or obligations shall be read into the Agreement against the Auction Agent.
(c) In the absence of bad faith or negligence on its part, the Auction
Agent shall not be liable for any action taken, suffered, or omitted or for any
error of judgment made by it in the performance of its duties under the
Agreement. The Auction Agent shall not be liable for any error of judgment made
in good faith unless the Auction Agent shall have been negligent in ascertaining
the pertinent facts.
6.2 Rights of the Auction Agent.
(a) The Auction Agent may rely and shall be protected in acting or
refraining from acting upon any communication authorized hereby and upon any
written instruction, notice, request, direction, consent, report, certificate,
share certificate or other instrument, paper or document believed in good faith
by it to be genuine. The Auction Agent shall not be liable for acting upon any
telephone communication authorized hereby which the Auction Agent believes in
good faith to have been given by the Trust or by a Broker-Dealer. The Auction
Agent may record telephone communications with the Trust or with the
Broker-Dealers or both.
(b) The Auction Agent may consult with counsel of its choice and the
advice of such counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon.
(c) The Auction Agent shall not be required to advance, expend or risk
its own Trusts 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
21
responsible for any misconduct or negligence on the part of any agent or
attorney appointed by it with due care hereunder.
6.3 Auction Agent's Disclaimer.
The Auction Agent makes no representation as to the validity or adequacy of
the Agreement, the Broker-Dealer Agreements or the Preferred Shares of any
series except that the Auction Agent hereby represents that the Agreement has
been duly authorized, executed and delivered by the Auction Agent and
constitutes a legal and binding obligation of the Auction Agent.
6.4 Compensation, Expenses and Indemnification.
(a) The Trust shall pay the Auction Agent from time to time reasonable
compensation for all services rendered by it under the Agreement and the
Broker-Dealer Agreements.
(b) The Trust shall reimburse the Auction Agent upon its request for
all reasonable out-of-pocket expenses, disbursements and advances incurred or
made by the Auction Agent in accordance with any provision of the Agreement and
the Broker-Dealer Agreements (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any expense or
disbursement attributable to its negligence or bad faith.
(c) The Trust shall indemnify the Auction Agent for and hold it
harmless against any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with its agency under the
Agreement and the Broker-Dealer Agreements, including the costs and expenses of
defending itself against any such claim or liability in connection with its
exercise or performance of any of its duties hereunder and thereunder.
7. Miscellaneous.
7.1 Term of Agreement.
(a) The term of the Agreement is unlimited unless it shall be
terminated as provided in this Section 7.1. The Trust may terminate the
Agreement at any time by so notifying the Auction Agent, provided that the Trust
has entered into an agreement in substantially the form of the Agreement with a
successor Auction Agent. The Auction Agent may terminate the Agreement upon
written
22
notice to the Trust on the date specified in such notice, which date shall be no
earlier than 45 days after the date of delivery of such notice.
(b) Except as otherwise provided in this paragraph (b), the respective
rights and duties of the Trust and the Auction Agent under the Agreement with
respect to any series of Preferred Shares shall cease upon termination of the
Agreement with respect to such series. The Trust's representations, warranties,
covenants and obligations to the Auction Agent under Sections 5 and 6.4 hereof
shall survive the termination of the Agreement with respect to any series of
Preferred Shares. Upon termination of the Agreement with respect to any series
of Preferred Shares, the Auction Agent shall, at the Trust's request, promptly
deliver to the Trust copies of all books and records maintained by it with
respect to Preferred Shares in connection with its duties hereunder.
7.2 Communications.
Except for (i) communications authorized to be by telephone pursuant to the
Agreement or the Auction Procedures and (ii) communications in connection with
Auctions (other than those expressly required to be in writing), all notices,
requests and other communications to any party hereunder shall be in writing
(including telecopy or similar writing) and shall be given to such party,
addressed to it, at its address or telecopy number set forth below:
If to the Trust, [Name of Trust]
c/o BlackRock Financial Management, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: [ ]
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Auction Agent, to the address or telecopy number set forth in the
Request and Acceptance Letter, or such other address or telecopy number as such
party may hereafter specify for such purpose by notice to the other party. Each
such notice, request or communication shall be effective when delivered at the
address specified herein. Communications shall be given on behalf of the Trust
by a Trust Officer and on behalf of the Auction Agent by telephone (confirmed by
telecopy or in writing) by an Authorized Officer.
7.3 Entire Agreement.
23
The Agreement contains the entire agreement between the parties relating
to, and superseding any prior agreement between the parties relating to, the
subject matter hereof, and there are no other representations, endorsements,
promises, agreements or understandings, oral, written or implied, between the
parties relating to the subject matter hereof except for agreements relating to
the compensation of the Auction Agent.
7.4 Benefits.
Nothing herein, express or implied, shall give to any Person, other than
the Trust, the Auction Agent and their respective successors and assigns, any
benefit of any legal or equitable right, remedy or claim hereunder.
7.5 Amendment; Waiver.
(a) The Agreement shall not be deemed or construed to be modified,
amended, rescinded, cancelled or waived, in whole or in part, except by a
written instrument signed by a duly authorized representative of the party to be
charged.
(b) Failure of either party 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.
The Agreement shall be binding upon, inure to the benefit of, and be
enforceable by, the respective successors and assigns of each of the Trust and
the Auction Agent.
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 Governing Law.
The Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware.
24
7.9 Declaration of Trust.
This Agreement has been executed on behalf of the Trust by the [Vice
President and Treasurer] of the Trust acting in such capacity and not
individually, and the obligations of the Trust set forth in this Agreement are
not binding upon any of the Trust's trustees, officers or shareholders
individually, but are binding only upon the assets and property of the Trust.
25
EXHIBIT A
FORM OF
BROKER-DEALER AGREEMENT
A-1
EXHIBIT B
SETTLEMENT PROCEDURES
B-1
EXHIBIT C
[NAME OF TRUST]
NOTICE OF AUCTION DATE FOR
MUNICIPAL AUCTION RATE CUMULATIVE PREFERRED SHARES
("Preferred Shares")
NOTICE IS HEREBY GIVEN that the Auction Date of the next
Auction for Series ___ of the Trust's Preferred Shares is scheduled to be
_______________, 19___ and the next Dividend Payment Date for Series ___ of the
Trust's Preferred Shares will be __________________, 19___.
[A Failure to Deposit in respect of the Series ___ Preferred
Shares currently exists. If, prior to 12:00 noon, New York City time, on the
fourth Business Day preceding the next scheduled Auction Date of the Series ____
Preferred Shares, such Failure to Deposit is not cured or the applicable Late
Charge is not paid, the next Auction will not be held. Notice of the next
Auction for the Series ___ Preferred Shares will be delivered when such Failure
to Deposit is cured and the applicable Late Charge is paid.(1)]
[NAME OF TRUST]
--------------------
(1) Include this language if a Failure to Deposit exists.
C-1
EXHIBIT D
[NAME OF TRUST]
NOTICE OF PROPOSED CHANGE OF
LENGTH OF RATE PERIOD OF
MUNICIPAL AUCTION RATE CUMULATIVE PREFERRED SHARES
("Preferred Shares")
[Name of Trust] (the "Trust") may exercise its option to
designate the Rate Period of its Series ____ Preferred Shares commencing [the
first day of the Special Rate Period] as a Special Rate Period.
By 11:00 A.M. on the second Business Day preceding the first
day of such proposed Special Rate Period, the Trust will notify
___________________ of either (a) its determination to exercise such option,
designating the length of such Special Rate Period for such series or (b) its
determination not to exercise such option.
[NAME OF TRUST]
Dated: __________, 19___
D-1
EXHIBIT E
[NAME OF TRUST]
NOTICE OF CHANGE OF LENGTH OF RATE PERIOD
MUNICIPAL AUCTION RATE CUMULATIVE PREFERRED SHARES
("Preferred Shares")
NOTICE IS HEREBY GIVEN that [NAME OF TRUST] (the "Trust") has
determined to designate the Rate Period of its Series ____ Preferred Shares
commencing on [the first day of the Special Rate Period] as a Special Rate
Period.
The Special Rate Period will be __________ [Rate Period Days].
The Auction Date for the Special Rate Period is [the Business
Day next preceding the first day of such Special Rate Period].
As a result of the Special Rate Period designation, the amount
of dividends payable on Series ____ Preferred Shares during the Special Rate
Period will be based on a 360-day year.
The Special Rate Period shall not commence if (a) an Auction
for Preferred Shares shall not be held on such Auction Date for any reason or
(b) an Auction for Preferred Shares shall be held on such Auction Date but
Sufficient Clearing Bids for such shares shall not exist in such Auction.
The scheduled Dividend Payment Dates for such series of
Preferred Shares during such Special Rate Period will be
_________________________.
[Special Redemption Provisions, if any]
Attached hereto is a Preferred Shares Basic Maintenance Report
showing that, as of the third Business Day next preceding such proposed Special
Rate Period, Moody's Eligible Assets (if ▇▇▇▇▇'▇ is rating such Preferred
Shares) have an aggregate Discounted Value at least equal to the Preferred
Shares Basic Maintenance Amount as of such Business Day (assuming for purposes
of the foregoing calculation that (i) the Maximum Rate is the Maximum Rate on
such Business Day as if such Business Day were the Auction Date for the proposed
Special Rate Period, and (ii) the Moody's Discount Factors applicable to Moody's
Eligible Assets are determined by reference to the first Moody's Exposure Period
longer than the Moody's Exposure Period then applicable to the Trust).
[NAME OF TRUST]
Dated: __________, 19__
E-1
EXHIBIT F
[NAME OF TRUST]
NOTICE OF DETERMINATION NOT TO CHANGE
LENGTH OF RATE PERIOD OF
MUNICIPAL AUCTION RATE CUMULATIVE PREFERRED SHARES
("Preferred Shares")
NOTICE IS HEREBY GIVEN that [NAME OF TRUST] (the "Trust") has
determined not to exercise its option to designate a Special Rate Period of its
Series ___ Preferred Shares and the next succeeding Rate Period of such series
will be a Minimum Rate Period of ____ Rate Period Days.
[NAME OF TRUST]
Dated: __________, 19___
F-1
EXHIBIT G
[NAME OF TRUST]
NOTICE OF CURE OF FAILURE TO DEPOSIT ON MUNICIPAL AUCTION
RATE CUMULATIVE PREFERRED SHARES
("Preferred Shares")
NOTICE IS HEREBY GIVEN that [NAME OF TRUST] (the "Trust") has
cured its Failure to Deposit and paid the applicable Late Charge with respect to
its Series ___ Preferred Shares. The dividend rate on the shares of Series ___
Preferred Shares for the current Dividend Period is _____________% per annum,
the Dividend Payment Date for the current Dividend Period is scheduled to be
_______________, 19___ and the next Auction Date is scheduled to be
_______________, 19___.
[NAME OF TRUST]
Dated: __________, 19___
G-1
EXHIBIT H
[NAME OF TRUST]
NOTICE OF CURE OF FAILURE TO DEPOSIT ON
MUNICIPAL AUCTION RATE CUMULATIVE PREFERRED SHARES
("Preferred Shares ")
NOTICE IS HEREBY GIVEN that [NAME OF TRUST] (the "Trust") has
cured its Failure to Deposit and paid the applicable Late Charge with respect to
its Series ____ Preferred Shares. The next Auction Date for the Series ____
Preferred Shares is scheduled to be on _________________, 19___.
[NAME OF TRUST]
Dated: __________, 19___
H-1
EXHIBIT I
[NAME OF TRUST]
NOTICE OF
[CAPITAL GAINS] [AND] [TAXABLE ORDINARY INCOME](1)
DIVIDEND FOR
MUNICIPAL AUCTION RATE CUMULATIVE PREFERRED SHARES
("Preferred Shares ")
NOTICE IS HEREBY GIVEN that the amount of the dividend payable
on ________________, 19____ for Series ____ of the Trust's Preferred Shares will
be determined by the Auction to be held on _______________, 19___. Up to
[$ A](2) [$ B ](3) per share of the dividend payable on such date as determined
by such Auction will consist of [capital gains](2) [ordinary income taxable for
Federal income tax purposes](3). If the dividend amount payable on such date as
determined by such Auction is less than [$ A ](2) [$ B ](3) per share, the
entire amount of the dividend will consist of [capital gains](2) [ordinary
income taxable for Federal income tax purposes](3). [To the extent such dividend
amount exceeds [$ A ] per share, any excess up to [$ B ] per share will consist
of ordinary income taxable for Federal income tax purposes.](4) Accordingly, the
aforementioned composition of the dividend payable on _______________, 19___
should be considered in determining Orders to be submitted with respect to the
Auction to be held on ________________, 19__. The Rate Multiple in effect for
such Auction will be ____%.
[NAME OF TRUST]
--------------------
(1) Include language with respect to capital gains, taxable
ordinary income or both, depending on the character of the designation to be
made with respect to the dividend(s).
(2) Include bracketed material if a portion of the dividend
will be designated capital gains.
(3) Include bracketed material if a portion of the dividend
will be designated ordinary income taxable for Federal income tax purposes and
no portion of the dividend will be designated capital gains.
I-1
(4) Include bracketed material if a portion of the dividend
will be designated capital gains and a portion will be designated ordinary
income taxable for Federal income tax purposes.
A = the maximum amount of capital gains allocated to such series of Preferred
Shares to be included in such dividend, divided by the number of Preferred
Shares.
B = the maximum amount of ordinary income taxable for Federal income tax
purposes allocated to such series of Preferred Shares to be included in such
dividend, divided by the number of shares in such series.
I-2