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Exhibit (k)(4)
Colonial Insured Municipal Fund
December __, 1999
Bankers Trust Company
Corporate Trust and Agency Group
Four Albany Street
New York, New York 10006
Attention: Auction Rate/Remarketed Securities
Ladies and Gentlemen:
Reference is made to the Colonial Auction Agency Agreement - Basic
Terms for Action as Auction Agent dated July 20, 1999 (the "Basic Terms"), which
Basic Terms are incorporated herein by reference and the receipt of which is
acknowledged by the undersigned. The Basic Terms, together with this Request and
Acceptance Letter, are sometimes referred to therein and herein as the "Auction
Agency Agreement" or the "Agreement." For purposes of the Basic Terms, you shall
be considered the Auction Agent and Colonial Insured Municipal Fund shall be
considered the Trust. Capitalized terms not defined herein shall have the
meanings ascribed to them in the Basic Terms.
We hereby request that you act as auction agent for the Series __
Municipal Auction Rate Cumulative Preferred Shares designated below (the
"Municipal Preferred"). You hereby accept such appointment as auction agent and
agree to act in accordance with the Agreement, including Basic Terms. The
following terms are to be added to the Basic Terms:
Bankers Trust Company
Corporate Trust and Agency Group
Four Albany Street
New York, New York 10006
Attention: Auction Rate/Remarketed Securities
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attached hereto are the By-Laws that fix the rights and preferences
of Municipal Auction Rate Cumulative Preferred Stock.
If the foregoing terms are acceptable to you, please so indicate in
the space provided below. This Request and Acceptance Letter may be executed in
any number of counterparts, each of which shall be an original, but all of which
shall constitute one and the same instrument.
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COLONIAL INSURED MUNICIPAL FUND
By: ______________________________________
Name:
Title:
Accepted by and ▇▇▇▇▇▇ to as of the date first written above:
BANKERS TRUST COMPANY
By: ______________________________
Name:
Title:
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COLONIAL AUCTION AGENCY AGREEMENT
Basic Terms for Acting as Auction Agent
July 20, 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 ("Municipal Preferred") issued by an
investment company registered under the Investment Company Act of 1940, as
amended, as further identified by such Request and Acceptance Letter (a
"Trust"), for which Colonial Management Associates, Inc. is the investment
adviser.
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The Trust proposes to issue shares of Municipal Preferred pursuant
to its Agreement, Declaration of Trust and Bylaws. The Trust desires that the
Auction Agent perform certain duties in connection with the Municipal Preferred
upon the terms and subject to the conditions of the Agreement.
1. Definitions and Rules of Construction.
1.1 Terms Defined By Reference to Bylaws.
Capitalized terms not defined herein shall have the respective
meanings specified in the Bylaws.
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 Municipal
Preferred.
(c) "Auction" shall have the meaning specified in Section 2.1
hereof.
(d) "Auction Procedures" shall mean the auction procedures
constituting Part II of Section 12.1 of the Bylaws of any Trust as of the
adoption thereof.
(e) "Authorized Officer" of the Auction Agent shall mean each Senior
Vice President, Vice President, Assistant Vice President and Associate of
the
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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) "By-Laws," with respect to any Trust, shall mean the By-Laws, as
amended and restated, of such Trust, a copy of which will be attached to
the Request and Acceptance Letter of such Trust.
(h) "Declaration" means the Agreement and Declaration of Trust of
any Trust, as the same may be amended, supplemented or modified.
(i) "Municipal Preferred" shall mean the preferred shares, no par
value, of any Trust designated as its "Municipal Auction Rate Cumulative
Preferred Shares" and bearing such further designation as to series as the
Board of Trustees of such Trust or any committee thereof shall specify, as
set forth in the Request Letter.
(j) "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 Municipal Preferred.
(k) "Settlement Procedures" shall mean the Settlement Procedures
attached hereto as Exhibit B.
(l) "Trust Officer" shall mean the Chairman of the Board of
Trustees, each Vice Chairman of the Board of Trustees (whether or not
designated by a number or word or words added before or after the title
"Vice Chairman"), 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 and each Associate 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 the Agreement:
(a) Words importing the singular number shall include the plural
number and vice versa.
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(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.
2. The Auction.
2.1 Purpose; Incorporation by Reference of
Auction Procedures and Settlement Procedures.
(a) The Bylaws for each series of Municipal Preferred 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
Directors or Board of Trustees, as the case may be, of the Trust has
adopted a resolution appointing the Auction Agent as auction agent for
purposes of the Auction Procedures for each series of Municipal Preferred.
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 Municipal
Preferred for each Subsequent Rate Period thereof for which the Applicable
Rate is to be determined by an Auction. Each periodic implementation of
such procedures is hereinafter referred to as an "Auction."
(b) All of the provisions contained in the Auction Procedures and
the Settlement Procedures are incorporated herein by reference in their
entirety and shall be deemed to be a part hereof to the same extent as if
such provisions were fully set forth herein.
2.2 Preparation for Each Auction; Maintenance
of Registry of Beneficial Owners.
(a) Not later than seven days prior to the first Auction Date for
the first series of Municipal Preferred 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
Municipal Preferred 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;
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provided, however, that if the Trust proposes to designate any Special
Rate Period of any series of Municipal Preferred pursuant to Section 4 of
Part I of Section 12.1 of the Bylaws, not later than 11:00 A.M., New York
City time, 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 Municipal
Preferred 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., New York City time,
on the new Auction Date or 9:15 A.M., New York City time, on the old
Auction Date.
(c) (i) The Auction Agent shall maintain a registry of the
beneficial owners of the shares of Municipal Preferred of each series who
shall constitute Existing Holders of shares of Municipal Preferred 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
shares of Municipal Preferred 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 shares of Municipal Preferred of each series a list of the initial
Existing Holders of the shares of each such series of Municipal Preferred,
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 shares of
Municipal Preferred 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 shares
of Municipal Preferred may have been transferred without compliance with
any restriction on the transfer thereof set forth in the Auction
Procedures.
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(ii) In the event of any partial redemption of any series of
Municipal Preferred, 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 shares of Municipal Preferred 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 shares of Municipal Preferred of such series shown in such registry.
(iii) The Auction Agent shall be required to register a
transfer of shares of Municipal Preferred of any series from an Existing
Holder of such shares of Municipal Preferred 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 shares of Municipal Preferred in an Auction of the failure of such
shares of Municipal Preferred 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 shares of Municipal Preferred may have been
transferred without compliance with any restriction on the transfer
thereof set forth in the Auction Procedures. The Auction Agent is not
required to accept any such notice for an Auction unless it is received by
the Auction Agent by 3:00 P.M., New York City time, 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 Municipal
Preferred 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
shares of Municipal Preferred to any Person other than the Trust and the
Broker-Dealer that provided such information.
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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 Municipal Preferred by either of the rating agencies (or
substitute or successor rating agencies) referred to in the definition of
"Rate Multiple" resulting in any change in the Rate Multiple for Municipal
Preferred 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, New York City time, on the Business Day
prior to the next Auction Date for any series of Municipal Preferred
succeeding such change. If the Trust designates all or a portion of any
dividend on shares of any series of Municipal Preferred to consist of net
capital gains or other income taxable for Federal income tax purposes, it
will indicate, in its notice in the form of Exhibit I hereto to the
Auction 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 Municipal Preferred 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 Municipal Preferred 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), 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 Municipal Preferred 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 Municipal Preferred with respect
to which the dividend, the rate for which was fixed on such Auction Date,
did not include any net capital gains or other income taxable for Federal
income tax purposes.
(b) (i) On each Auction Date for any series of Municipal
Preferred, the Auction Agent shall determine the Maximum Rate for such
series. The Maximum Rate for any series of Municipal Preferred 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 Section
12.1 of the Bylaws, 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:
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(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 the Trust pursuant to Section 4 of Part I of Section 12.1 of
the Bylaws, 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 Bill 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 Municipal Preferred, 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
Section 12.1 of the Bylaws, 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
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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 Bill 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 Bylaws if the rate obtained by
the Auction Agent is quoted on a discount basis, or if such rate is quoted
on a basis other than an interest or bond equivalent or discount basis the
Auction Agent shall convert the quoted rate to an interest or bond
equivalent rate after consultation with the 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 Bill 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 Bylaws 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, New York City
time, on the Business Day prior to the next Auction Date for Municipal
Preferred succeeding such change. In determining the Maximum Rate for any
series of Municipal Preferred 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).
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2.4 Auction Schedule.
The Auction Agent shall conduct Auctions in accordance with the
schedule set forth below. Such schedule may be changed by the Auction Agent with
the consent of the 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
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 shares of
Municipal Preferred are allocated as provided in Section 4 of the Auction
Procedures. The Auction Agent gives notice of the Auction results as set forth
in paragraph (a) of the Settlement Procedures.
The Auction Agent shall follow the notification procedures set forth in
paragraph (a) of the Settlement Procedures.
2.5 Designation of Special Rate Period.
(a) The Bylaws 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 Municipal Preferred
will be a Minimum Rate
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Period (a duration of seven days, subject to certain exceptions) and (ii)
each Rate Period following a Rate Period of any series of Municipal
Preferred 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 Bylaws, the Trust may, at its option, designate
a Special Rate Period for any series of Municipal Preferred in the manner
described in Section 4 of Part I of Section 12.1 of the Bylaws.
(i) If the Board of Trustees proposes to designate any
succeeding Subsequent Rate Period of any series of Municipal Preferred 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
Municipal Preferred 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., New York City time, 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) and (B) the Auction Agent shall deliver such
notice to the Broker-Dealers for such series not later than 3:00 P.M., New
York City time, 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., New York City time, 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
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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., New York City
time, 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 shall, in the case of a Minimum Rate Period or a Special
Rate Period of 28 Rate Period Days or fewer, and may, in the case of any other
Special Rate Period, designate all or a portion of any dividend on shares of any
series of Municipal Preferred to consist of net capital gains or other income
taxable for Federal income tax purposes by delivering to the Auction Agent a
notice in the form of Exhibit I hereto of such designation 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 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, the Auction Agent shall notify each Broker-Dealer for the
related series 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 Municipal Preferred 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
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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 shares of
Municipal Preferred and (2) if such Failure to Deposit consisted of the
failure timely to pay to the Auction Agent the Redemption Price of the
shares of Municipal Preferred, 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 liquidation preference of the outstanding shares of
Municipal Preferred to be 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
shares of Municipal Preferred 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 shares of Municipal Preferred 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
Section 12.1 of the Bylaws (such Late Charge, for purposes of this clause
(b)(ii) 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
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(y) commencing on the date on which the Rate Period during which Failure
to Deposit occurs commenced);
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 shares of Municipal
Preferred 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
shares of Municipal Preferred and (ii) without duplication, the Redemption
Price for the shares of Municipal Preferred, 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 shares of Municipal Preferred when the related Notice of
Redemption 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, New York City time, on each Auction
Date for any series of Municipal Preferred, 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 Municipal
Preferred 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, among
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other things, shall set forth the series of Municipal Preferred to which
such Broker-Dealer Agreement relates.
2.9 Ownership of Shares of Municipal Preferred.
The Trust shall notify the Auction Agent if the Trust or any
affiliate of the Trust acquires any shares of Municipal Preferred of any series.
Neither the Trust nor any affiliate of the Trust shall submit any Order in any
Auction for Municipal Preferred, 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 shares of Municipal Preferred of any series
(i) on each Dividend Payment Date for such series, dividends on the shares of
Municipal Preferred of such series, (ii) on any date fixed for redemption of
shares of Municipal Preferred 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 Trusts 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 Municipal Preferred 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 Section 12.1 of the Bylaws 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 Section
12.1 of the Bylaws with respect to such series. The Trust shall notify the
Auction Agent in writing of a decision to redeem shares of any series of
Municipal Preferred 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 Section 12.1 of the
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Bylaws. Such notice by the Trust to the Auction Agent shall contain the
information required by paragraph (c) of Section 11 of Part I of Section 12.1 of
the Bylaws to be stated in the Notice of Redemption required to be mailed by the
Trust to such Holders.
4. The Auction Agent as Transfer Agent and Registrar.
4.1 Issue of Stock or Shares Certificates.
Upon the Date of Original Issue of each series of Municipal
Preferred, 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 Municipal Preferred 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 shares of Municipal Preferred
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 Stock or Share 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 Bylaws 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 Bylaws and resolutions of the Trust.
4.5 Disposition of Cancelled Certificates;
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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 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 Stock or Record Books.
For so long as the Auction Agent is acting as the transfer agent
for any series of Municipal Preferred pursuant to the Agreement, it shall
maintain a stock or record book containing a list of the Holders of the shares
of Municipal Preferred of each such series. In case of any request or demand for
the inspection of the stock or 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 stock or 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 shares of Municipal
Preferred 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 a duly organized and existing business trust in
good standing under the laws of the State of its incorporation or
organization and has full corporate power or all requisite power to
execute and deliver the Agreement and to authorize, create and issue the
shares of Municipal Preferred of each series, and the shares of
Municipal Preferred 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;
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(c) the form of the certificate evidencing the shares of
Municipal Preferred of each series complies or will comply with all
applicable laws of the State of its incorporation or organization;
(d) when issued, the shares of Municipal Preferred 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 the shares of Municipal
Preferred of each series;
(e) the execution and delivery of the Agreement and the issuance
and delivery of the shares of Municipal Preferred 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 to date) or the Bylaws 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 shares of Municipal Preferred of
any series.
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.
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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 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 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 shares of
Municipal Preferred 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
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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 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 Municipal Preferred 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 Municipal
Preferred. Upon termination of the Agreement with respect to any series
of Municipal Preferred, 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 Municipal Preferred 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]
One Financial Center
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Boston, MA 02111
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.
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.
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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 New York.
If the Trust is a Massachusetts business trust, the following
provision is deemed to be included in the Basic Terms:
7.9 Declaration of Trust.
The Trust's Agreement and Declaration of Trust (as amended) is on
file with the Secretary of the Commonwealth of Massachusetts. 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.
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EXHIBIT A
FORM OF
BROKER-DEALER AGREEMENT
25
EXHIBIT B
SETTLEMENT PROCEDURES
26
EXHIBIT C
[NAME OF TRUST]
NOTICE OF AUCTION DATE FOR
MUNICIPAL AUCTION RATE CUMULATIVE PREFERRED SHARES
("Municipal Preferred")
NOTICE IS HEREBY GIVEN that the Auction Date of the next Auction for
Series __ of the Trust's Municipal Preferred is scheduled to be ____________,
19__ and the next Dividend Payment Date for Series __ of the Trust's Municipal
Preferred will be _____________, 19__.
[A Failure to Deposit in respect of the Series __ Municipal Preferred
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 __
Municipal Preferred, 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 __ Municipal Preferred 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.
27
EXHIBIT D
[NAME OF TRUST]
NOTICE OF PROPOSED CHANGE OF
LENGTH OF RATE PERIOD OF
MUNICIPAL AUCTION RATE CUMULATIVE PREFERRED STOCK [SHARES]
("Municipal Preferred")
[Name of Trust] (the "Trust") may exercise its option to designate
the Rate Period of its Series __ Municipal Preferred commencing [the first day
of the Special Rate Period] as a Special Rate Period.
By 11:00 A.M., New York City time, 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__
28
EXHIBIT E
[NAME OF TRUST]
NOTICE OF CHANGE OF LENGTH OF RATE PERIOD
MUNICIPAL AUCTION RATE CUMULATIVE PREFERRED SHARES
("Municipal Preferred")
NOTICE IS HEREBY GIVEN that [NAME OF TRUST] (the "Trust") has
determined to designate the Rate Period of its Series __ Municipal Preferred
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 __ Municipal Preferred 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
shares of Municipal Preferred shall not be held on such Auction Date for any
reason or (b) an Auction for shares of Municipal Preferred 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 Municipal
Preferred during such Special Rate Period will be ______________.
[Special Redemption Provisions, if any]
Attached hereto is a Municipal Preferred 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 shares of
Municipal Preferred) and S&P Eligible Assets (if S&P is rating such shares of
Municipal Preferred) each have an aggregate Discounted Value at least equal to
the Municipal Preferred 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
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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__
30
EXHIBIT F
[NAME OF TRUST]
NOTICE OF DETERMINATION NOT TO CHANGE
LENGTH OF RATE PERIOD OF
MUNICIPAL AUCTION RATE CUMULATIVE PREFERRED SHARES
("Municipal Preferred")
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 __ Municipal Preferred and the next succeeding Rate Period of such series
will be a Minimum Rate Period of ___ Rate Period Days.
[NAME OF TRUST]
Dated: __________ , 19__
31
EXHIBIT G
[NAME OF TRUST]
NOTICE OF CURE OF
FAILURE TO DEPOSIT ON
MUNICIPAL AUCTION RATE CUMULATIVE PREFERRED SHARES
("Municipal Preferred")
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 __ Municipal Preferred. The dividend rate on the shares of Series __
Municipal Preferred 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__
32
EXHIBIT H
[NAME OF TRUST]
NOTICE OF CURE OF
FAILURE TO DEPOSIT ON
MUNICIPAL AUCTION RATE CUMULATIVE PREFERRED SHARES
("Municipal Preferred")
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 __ Municipal Preferred. The next Auction Date for the Series __ Municipal
Preferred is scheduled to be on ____________ 19__.
[NAME OF TRUST]
Dated: _______________ , 19__
33
EXHIBIT I
[NAME OF TRUST]
NOTICE OF
[CAPITAL GAINS] [AND] [TAXABLE ORDINARY INCOME](1/)
DIVIDEND FOR
MUNICIPAL AUCTION RATE CUMULATIVE PREFERRED SHARES
("Municipal Preferred")
NOTICE IS HEREBY GIVEN that the amount of the dividend payable on
_______________, 19__ for Series __ of the Trust's Municipal Preferred 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.
(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.
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(Footnotes continued)
---------------------
(A) = the maximum amount of capital gains allocated to such series of Municipal
Preferred to be included in such dividend, divided by the number of
shares of Municipal Preferred.
(B) = the maximum amount of ordinary income taxable for Federal income tax
purposes allocated to such series of Municipal Preferred to be included
in such dividend, divided by the number of shares in such series.