Exhibit (j)(ii)
TS&W / CLAYMORE TAX-ADVANTAGED BALANCED FUND
AUCTION AGENCY AGREEMENT
dated as of _______, 2004
Relating to
Auction Market Preferred Shares
Series M and Series T
of the
TS&W / CLAYMORE TAX-ADVANTAGED BALANCED FUND
The Bank of New York,
as Auction Agent
AUCTION AGENCY AGREEMENT
This Auction Agency Agreement (this "Agreement"), dated as of ______,
2004, is between the TS&W / Claymore Tax-Advantaged Balanced Fund (the "Fund")
and The Bank of New York, a New York banking corporation.
The Fund proposes to issue an aggregate of [] preferred shares, par
value $0.01 per share, liquidation preference $25,000 per share, designated as
Auction Market Preferred Shares, Series M, and an aggregate of [] preferred
shares, par value $0.01 per share, liquidation preference $25,000 per share,
designated as Auction Market Preferred Shares, Series T (together the "AMPS"),
pursuant to the Statement of Preferences (as defined below).
The Fund desires that The Bank of New York perform certain duties as
agent in connection with each Auction (as defined below) (in such capacity, the
"Auction Agent"), and as the transfer agent, registrar, dividend paying agent
and redemption agent with respect to the AMPS (in such capacity, the "Paying
Agent"), upon the terms and conditions of this Agreement, and the Fund hereby
appoints The Bank of New York as said Auction Agent.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the Fund and the Auction Agent agree as follows:
1. Definitions and Rules of Construction.
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) "AMPS" shall mean the preferred shares, par value $.01 per
share, of the Fund designated as its "Auction Market Preferred Shares" and
bearing such further designation as to series as the Board of Trustees of the
Fund or any committee thereof shall specify.
(c) "Auction" shall have the meaning specified in Section 2.1
hereof.
(d) "Auction Procedures" shall mean the auction procedures
constituting Section 9 of the Statement as of the filing thereof.
(e) "Authorized Officer" of the Auction Agent shall mean each -
Vice President, Assistant Vice President and Assistant Treasurer of the Auction
Agent assigned to the Dealing and Trading Group of its Corporate Trust
Department and every other officer or employee of the Auction Agent designated
as an "Authorized Officer" for purposes hereof in a written communication to the
Fund.
(f) "Broker-Dealer Agreement" shall mean each agreement between
the Auction Agent and a Broker-Dealer substantially in the form attached hereto
as Exhibit A.
(g) "Settlement Procedures" shall mean the Settlement Procedures
attached hereto as Exhibit B.
(h) "Statement" shall mean the Statement of Preferences of
Auction Market Preferred Shares, as the same may be amended, supplemented or
modified from time to time.
(i) "Fund 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 Fund, and every other officer or
employee of the Fund designated as a "Fund 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.
(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) This Agreement shall apply separately but equally to all
series of AMPS that may be issued. Sections 1 and 2 hereof shall be read in
conjunction with the Statement and in the case of any conflict between the terms
of any document incorporated herein by reference and the terms hereof, the
Auction Agent shall not be liable for its actions or inaction in accordance with
the terms of this Agreement.
2. The Auction.
2.1 Purpose; Incorporation by Reference of Auction Procedures and
Settlement Procedures.
(a) The Board of Trustees of the Fund has adopted a resolution
appointing The Bank of New York as Auction Agent for purposes of the Auction
Procedures. The Auction Agent hereby accepts such appointment and agrees that,
on
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each Auction Date, it shall follow the procedures set forth in this Section 2
and the Auction Procedures for the purpose of determining the Applicable Rate
for any Subsequent Rate Period of any series of AMPS for which the Applicable
Rate is to be determined by 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 AMPS subject to an Auction, the Fund shall provide the
Auction Agent with a list of the Broker-Dealers. Not later than seven days prior
to any Auction Date for any series of AMPS for which any change in such list of
Broker-Dealers is to be effective, the Fund will notify the Auction Agent in
writing of such change and, if any such change involves the addition of a
Broker-Dealer to such list, shall cause to be delivered to the Auction Agent for
execution by the Auction Agent a Broker-Dealer Agreement signed by such
Broker-Dealer; provided, however, that if the Fund proposes to designate any
Special Rate Period of any series of AMPS pursuant to Section 3 of Part I of the
Statement, not later than 11:00 A.M. on the second 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 reasonably practicable under the circumstances,
the Fund shall provide the Auction Agent with a list of the Broker-Dealers for
such series, in the event that such list contains any Broker-Dealer that has not
already executed the Broker-Dealer Agreement, and a manually signed copy of the
Broker-Dealer Agreement for such Broker-Dealer. The Auction Agent shall have
entered into a Broker-Dealer Agreement with each Broker-Dealer prior to the
participation of any such Broker-Dealer in any Auction.
(b) As promptly as practicable after determining each Auction
Date, but not later than 9:15 a.m. on the Business Day preceding such Auction
Date, the Auction Agent shall notify the Broker-Dealers, by such means as the
Auction Agent deems practicable, of the scheduled date of such Auction Date. If
the Auction Date for any Auction shall be changed after the Auction Agent has
given such notice or the notice referred to in clause (g) of paragraph 1 of the
Settlement Procedures, the Auction Agent, by such means as the Auction Agent
deems practicable, shall give notice of such change to the Broker-Dealers not
later than the earlier of (x) 9:15
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a.m. on the Business Day preceding the new Auction Date, and (y) 9:15 a.m. on
the original Auction Date. Thereafter, the Broker-Dealers shall promptly notify
customers of the Broker-Dealers that are Existing Holders of such change in the
Auction Date.
(c) The provisions contained in the Statement concerning Special
Rate Periods and the notification of a Special Rate Period will be followed by
the Fund and, to the extent applicable, the Auction Agent, and the provisions
contained therein are incorporated herein by reference in their entirety and
shall be deemed to be a part of this Agreement to the same extent as if such
provisions were set forth fully herein.
(i) On each Auction Date, the Auction Agent shall determine the
dividend rate and the Maximum Applicable Rate. If any Treasury Index Rate
is not quoted on an interest or bond equivalent basis, as the case may be,
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 convert the quoted
rate to an interest or bond equivalent rate after consultation with the
Fund as to the method of such conversion.
(ii) If any LIBOR Rate is to be determined by reference to Telerate
Page 3750 or by rate quotations provided by LIBOR Dealer(s), as the case
may be, and Telerate Page 3750 is unavailable or the LIBOR Dealer(s) fail
to provide rate quotations, as the case may be (as described in the
Statement), then the Auction Agent shall immediately notify the Fund so
that the Fund can determine whether to select a Substitute LIBOR Dealer(s)
to provide such rate quotations(s) not being supplied.
(iii) If any Treasury Index 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 Index Rate, the Auction Agent shall promptly notify the Fund
so that the Fund can determine whether to select a Substitute U.S.
Government Securities Dealer(s) to provide the quotation(s) not being
supplied by any U.S. Government Securities Dealer(s). The Fund shall
promptly advise the Auction Agent of any such selection.
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(iv) Based solely on information provided to the Auction Agent from
the respective Broker-Dealers, the Auction Agent shall maintain a registry
of the owners of the AMPS of each series who shall constitute Existing
Holders of AMPS 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 AMPS of such series. The Auction Agent
shall keep such registry current and accurate based solely on the
information provided to it from time to time by the Broker-Dealer. The Fund
shall provide or cause to be provided to the Auction Agent at or prior to
the Date of Original Issue of the AMPS of each series a list of the initial
Existing Holders of the shares of each such series of AMPS, 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
may rely upon, as conclusive evidence of the identities of the Existing
Holders of AMPS of any series (A) such list, (B) the results of Auctions,
(C) notices from any Broker-Dealer as described in Section 2.2(d) hereof
and (D) the results of any procedures approved by the Fund that have been
devised for the purpose of determining the identities of Existing Holders
in situations where AMPS may have been transferred without compliance with
any restriction on the transfer thereof set forth in the Auction
Procedures.
(v) In the event of any partial redemption of any series of AMPS, 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
AMPS 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 AMPS of such series shown in such registry.
(vi) The Auction Agent shall be required to register a transfer of
AMPS of any series from an Existing Holder of such AMPS only if such
transfer is to another Existing Holder, or other Person if permitted by the
Fund, and only if such transfer is made (A) pursuant to an Auction, (B) the
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Auction Agent has been notified in writing (I) in a notice substantially in
the form of Exhibit B to the Broker-Dealer Agreements by a Broker-Dealer of
such transfer or (II) in a notice substantially in the form of Exhibit C to
the Broker-Dealer Agreements by the Broker-Dealer of any Existing Holder,
or other Person if permitted by the Fund, that purchased or sold such AMPS
in an Auction of the failure of such AMPS to be transferred as a result of
such Auction or (C) pursuant to procedures approved by the Fund that have
been devised for the purpose of determining the identities of Existing
Holders in situations where AMPS 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. on the Business Day preceding such Auction. The Auction Agent shall
rescind a transfer made on the registry of the Existing Holders of any AMPS
if the Auction Agent has been notified in writing by the Broker Dealer, in
a notice substantially in the form of Exhibit C to the Broker-Dealer
Agreement, of any Person that (i) purchased any AMPS and the seller failed
to deliver such shares or (ii) sold any AMPS and the purchaser failed to
make payment to such Person upon delivery to the purchaser of such shares.
(d) The Auction Agent may, but shall have no obligation to,
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 AMPS 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 AMPS to any
Person other than the Fund and the Broker-Dealer that provided such information;
provided, however, that the Auction Agent reserves the right and is authorized
to disclose any such information if (a) it is ordered to do so by a court of
competent jurisdiction or a regulatory body, judicial or quasi-judicial agency
or authority having the authority to compel such disclosure, (b) it is advised
by its counsel that its failure to do so would be unlawful or (c) failure to do
so would expose the Auction Agent to loss, liability, claim, damage or expense
for which it has not received indemnity or security satisfactory to it.
2.3 Auction Schedule.
The Auction Agent shall conduct Auctions in accordance with the
schedule set forth below. Such schedule may be changed by the Auction Agent with
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the consent of the Fund, 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 Fund and
Broker-Dealers of the applicable
Maximum Applicable Rate and the LIBOR
Rate(s) and Treasury Index Rate(s), as
the case may be, used in determining
such Maximum Applicable Rate.
9:30 A.M. - 1:30 P.M. Auction Agent assembles information
communicated to it by Broker-Dealers as
provided in Section 9(d)(i) 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 9(d)(i) of the
Auction Procedures.
By approximately 3:30 P.M. Auction Agent advises Fund of results
of Auction as provided in Section
9(d)(ii) of the Auction Procedures.
Submitted Bids and Submitted Sell
Orders are accepted and rejected and
AMPS allocated as provided in Section
9(e) of the Auction Procedures. Auction
Agent gives notice of Auction results
as set forth in paragraph 1 of the
Settlement Procedures.
The Auction Agent shall follow the notification procedures set forth
in paragraph 1 of the Settlement Procedures.
The Auction Agent will follow the Bond Market Association's Market
Practice U.S. Holiday Recommendations for shortened trading days for the bond
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markets (the "BMA Recommendation") unless the Auction Agent is instructed
otherwise by the Fund. In the event of a BMA Recommendation applying to an
Auction Date, the Submission Deadline will be 11:30 a.m., instead of 1:30 p.m.,
for such Auction Date.
1.1 Notice of Auction Results.
The Auction Agent will advise each Broker-Dealer who submitted a Bid
or Sell Order in an Auction whether such Bid or Sell Order was accepted or
rejected in whole or in part and of the Applicable Rate for the next Rate Period
for the related AMPS by telephone or by other electronic means acceptable to the
parties through its Auction Processing System as set forth in paragraph 1 of the
Settlement Procedures.
1.2 Broker-Dealers.
(a) Not later than 12:00 Noon on each Auction Date for any series
of AMPS, the Fund 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
2.7 of the Broker-Dealer Agreements for such series. The Auction Agent shall
apply such moneys as set forth in Section 2.7 of each such Broker-Dealer
Agreement.
(b) The Auction Agent shall terminate any Broker-Dealer Agreement
as set forth therein if so directed by the Fund, provided that at least one
Broker-Dealer Agreement would be in effect for each series of AMPS after such
termination.
(c) The Auction Agent shall from time to time enter into such
Broker-Dealer Agreements with one or more Broker-Dealers as the Fund shall
request, and shall enter into such schedules to any such Broker-Dealer
Agreements as the Fund shall request, which schedules, among other things, shall
set forth the series of AMPS to which such Broker-Dealer Agreement relates.
(d) The Auction Agent shall maintain a list of Broker-Dealers.
1.3 Information Concerning Rates.
(a) The Applicable Percentage and the Applicable Spread on the
date of the Agreement are those rates as determined by the Fund and provided to
the Auction Agent on the date even herewith. If there is any change in the
credit rating of AMPS by the rating agency (or substitute or successor rating
agencies)
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referred to in the definition of "Applicable Percentage" and "Applicable Spread"
resulting in any change in the Applicable Percentage or Applicable Spread for
AMPS after the date given herewith, the Fund shall notify the Auction Agent in
writing of such change in the Applicable Percentage or Applicable Spread prior
to 12:00 Noon on the Business Day prior to the next Auction Date for any series
of AMPS succeeding such change. In determining the Maximum Applicable Rate for
any series of AMPS on any Auction Date as set forth in 2.6(a)(i) hereof, the
Auction Agent shall be entitled to rely on the last Applicable Percentage and
Applicable Spread for AMPS of which it has most recently received notice from
the Fund (or, in the absence of such notice, the percentage or spread determined
by reference to the definition of Applicable Percentage and Applicable Spread,
respectively).
(i) On each Auction Date for any series of AMPS, the Auction Agent
shall determine the Maximum Applicable Rate for such series in accordance
with Section 9 of the Statement.
Not later than 9:30 A.M. on each Auction Date the Auction Agent shall
notify the Fund and the Broker-Dealers of the Maximum Applicable Rate and
the LIBOR Rate(s) and Treasury Index Rate(s), as the case may be, used to
make such determination.
(ii) From and after a failure to deposit by the Fund during any Rate
Period of any series of AMPS, until such failure is cured and a Late Charge
is paid, in accordance with subparagraph (c) of Section 2 of the Statement,
on the first day of each Rate Period of such series the Auction Agent shall
determine the Treasury Index Rate for such Rate Period of more than 365
days and the LIBOR Rate for Rate Periods of 365 days or fewer. Not later
than 9:30 A.M. on each such first day, the Auction Agent shall notify the
Fund of the applicable LIBOR Rate or Treasury Index Rate.
(iii) If any LIBOR Rate is to be determined by reference to Telerate
Page 3750 or by rate quotations provided by LIBOR Dealer(s), as the case
may be, and Telerate Page 3750 is unavailable or the LIBOR Dealer(s) fail
to provide rate quotations, as the case may be (as described in the
Statement), then the Auction Agent shall immediately notify the Fund so
that the Fund can determine whether to select a Substitute LIBOR Dealer(s)
to provide such rate quotations(s) not being supplied.
(iv) If any Treasury Index Rate is not quoted on an interest or bond
equivalent basis, as the case may be, the Auction Agent shall convert the
quoted rate to the interest or bond equivalent thereof as set forth in the
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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 convert the quoted rate to an interest or bond
equivalent rate after consultation with the Fund as to the method of such
conversion.
(v) If any Treasury Index 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 promptly notify the Fund so
that the Fund can determine whether to select a Substitute U.S. Government
Securities Dealer(s) to provide the quotation(s) not being supplied by any
U.S. Government Securities Dealer(s). The Fund shall promptly advise the
Auction Agent of any such selection.
1.4 Designation of Special Rate Period.
(a) Subject to the Fund's option to designate a Special Rate
Period as referred to in paragraph (b) of this Section 2.7, (i) each Rate Period
of any series of AMPS will be a 7-Day Rate Period or a 28-Day Rate Period (a
duration of seven days in the cases of Series [ ] or twenty-eight days in the
cases of Series [ ], subject to certain exceptions) and (ii) each Rate Period
following a Rate Period of any series of AMPS that is other than a 7-Day Rate
Period in the cases of Series [ ] or a 28-Day Rate in the cases of Series [ ]
will be a 7-Day Rate Period in the cases of S[ ] or a 28-Day Rate in the cases
of Series [ ].
(b) Pursuant to the Statement, the Fund may, at its option,
designate a Special Rate Period for any series of AMPS in the manner described
in Section 2 of the Statement.
(i) If the Board of Trustees proposes to designate any subsequent Rate
Period of any series of AMPS as a Special Rate Period, (A) the Fund shall
deliver to the Auction Agent a notice of such proposed Special Rate Period
in the form of Exhibit C hereto not less than 20 (or such lesser number of
days as may be reasonably practicable under the circumstances) nor more
than 30 days prior to the first day of such proposed Special Rate Period
and (B) the Auction Agent on behalf of the Fund shall deliver such notice
by first-class mail, postage prepaid, to each Existing Holder of shares of
such series of AMPS at the address set forth for such Existing Holder in
the records of the
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Auction Agent and to the Broker-Dealers for such series as promptly as
practicable after its receipt of such notice from the Fund.
(ii) If the Board of Trustees determines to designate such succeeding
subsequent Rate Period as a Special Rate Period, (A) the Fund shall deliver
to the Auction Agent a notice of such determination in the form of Exhibit
D hereto not later than 11:00 A.M. on the second Business Day next
preceding the first day of such proposed Special Rate Period and (B) the
Auction Agent shall deliver such notice to the Broker-Dealers for such
series not later than 3:00 P.M. on such second Business Day.
(iii) If the Fund 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 stating that the Fund has
determined not to exercise its option to designate such succeeding
Subsequent Rate Period as a Special Rate Period, in the form of Exhibit E
hereto, or shall fail to timely deliver either such notice or a notice in
the form of Exhibit F hereto, the Auction Agent shall deliver a notice in
the form of Exhibit E hereto to the Broker-Dealers for such series not
later than 3:00 P.M. on such second Business Day.
Such change in the length of any Rate Period shall not occur if (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.
1.5 Failure to Deposit.
(a) If any failure to deposit shall have occurred with respect to
any series of AMPS during any Rate Period thereof (other than any Special Rate
Period consisting of more than 364 days or any Rate Period succeeding any
Special Rate Period consisting of more than 364 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 fourth 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 2.8(c) hereof and the Fund 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 Rate Period on such shares, an
amount computed by multiplying (x) 300% of the Reference Rate for the Rate
Period during which such failure to deposit occurs on the Dividend Payment Date
for such Rate Period by (y) a fraction, the numerator of which shall be the
number of days for which such failure to deposit has not been
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cured in accordance with Section 2.8(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 AMPS 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 any series of AMPS, if any, for which
notice of redemption has been given by the Fund, an amount computed by
multiplying (x) 300% 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 2.8(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 such
series of AMPS to be redeemed, then the Auction Agent shall deliver a notice it
received in the form of Exhibit F 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 Fund curing such failure to deposit and such
Late Charge.
(b) If:
(i) any failure to deposit shall have occurred with respect to AMPS
during any Rate Period thereof (other than any Special Rate Period
consisting of more than 364 days or any Rate Period succeeding any Special
Rate Period consisting of more than 364 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 fourth 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 2.8(c) hereof or the Fund shall
not have paid the applicable Late Charge to the Auction Agent; or
(ii) any failure to deposit shall have occurred with respect to AMPS
during a Special Rate Period thereof consisting of more than 364 days, or
during any Rate Period thereof succeeding any Special Rate Period
consisting of more than 364 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 2.8(c) hereof or the Fund shall not have
paid the applicable Late Charge to the Auction Agent;
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then the Auction Agent shall deliver the notice it received in the form of
Exhibit G hereto to the Broker-Dealers for such series as soon as practicable
following such fourth Business Day.
(c) A failure to deposit with respect to shares of a series of
AMPS shall have been cured with respect to any Rate Period if, within the
respective time periods described immediately above, the Fund shall have paid to
the Auction Agent (i) all accumulated and unpaid dividends on shares of such
series of AMPS and (ii) without duplication, the Redemption Price for the shares
of such series of AMPS, if any, for which Notice of Redemption has been mailed;
provided, however, that the foregoing clause (ii) shall not apply to the Fund's
failure to pay the Redemption Price in respect of shares of a series of AMPS
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.
1.6 Ownership of Shares of AMPS.
The Fund shall notify the Auction Agent if the Fund or any affiliate
of the Fund acquires any AMPS of any series. Neither the Fund nor any affiliate
of the Fund shall submit any Order in any Auction for AMPS, except as set forth
in the next sentence. Any Broker-Dealer that is an affiliate of the Fund may
submit Orders in Auctions, but only if such Orders are not for its own account.
For purposes of this Section 2.9, a Broker-Dealer shall not be deemed to be an
affiliate of the Fund 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 Fund. The
Auction Agent shall have no duty or liability with respect to enforcement of
this Section 2.9.
1.7 Access to and Maintenance of Auction Records.
The Auction Agent shall afford to the Fund, its agents, independent
public accountants and counsel and the Broker-Dealers, access at reasonable
times during normal business hours to review and make extracts or copies of all
books, records, documents and other information concerning the conduct and
results of Auctions (at no cost to the Auction Agent), provided that any such
agent, accountant, counsel or Broker-Dealer shall furnish the Auction Agent with
a letter from the Fund requesting that the Auction Agent afford such person
access. 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.
14
The Fund agrees to keep confidential any information regarding the
customers of any Broker-Dealer received from the Auction Agent in connection
with this Agreement or any Auction, and shall not disclose such information or
permit the disclosure of such information without the prior written consent of
the applicable Broker-Dealer to anyone except such agent, accountant or counsel
engaged to audit or review the results of Auctions as permitted by this Section
2.10. The Fund reserves the right to disclose any such information if it is
advised by its counsel that its failure to do so would (i) be unlawful or (ii)
expose it to liability. Any such agent, accountant or counsel, before having
access to such information, shall be deemed to have agreed to keep such
information confidential and not to disclose such information or permit
disclosure of such information without the prior written consent of the
applicable Broker-Dealer, provided that such agent, accountant or counsel may
reserve the right to disclose any such information if it is advised by its
counsel that its failure to do so would (i) be unlawful or (ii) expose it to
liability. The Auction Agent shall have no responsibility for, and shall have no
liability in connection with, the Fund's performance of its duties under this
Section 2.10.
2. 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 AMPS of any series (i) on each Dividend Payment Date
for such series, dividends on the AMPS of such series, (ii) on any date fixed
for redemption of AMPS 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 Fund with which to pay such dividends, Redemption Price or Late Charge.
The amount of dividends for any Rate Period for any series of AMPS to be paid by
the Auction Agent to the Holders of such shares of such series will be
determined by the Fund as set forth in Section 2 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 Fund as set forth in Section 4 of
the Statement with respect to such series. The Fund shall notify the Auction
Agent in writing of a decision to redeem shares of any series of AMPS at least
one day 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 4 of the
Statement. Such notice by the Fund to the Auction Agent shall contain the
information required by paragraph (c) of Section 4 of the Statement to be stated
in the notice of redemption required to be mailed by the Fund to such Holders.
15
3. The Auction Agent as Transfer Agent and Registrar.
3.1 Issue of Stock or Shares Certificates.
Upon the Date of Original Issue of each series of AMPS, one or more
certificates representing all of the shares of such series issued on such date
shall be issued by the Fund and, at the request of the Fund, registered in the
name of Cede & Co. and countersigned by the Paying Agent.
3.2 Registration of Transfer of Shares.
Shares of each series of AMPS shall be registered solely in the name
of the Securities Depository or its nominee.
3.3 Removal of Legend on Restricted Shares.
All requests for removal of legends on AMPS 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 Fund Officer authorizing
the Paying Agent to remove the legend on the basis of said opinion.
3.4 Lost Stock or Share Certificates.
The Paying 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 Fund and
the Paying Agent, subject at all times to provisions of law, the By-Laws of the
Fund governing such matters and resolutions adopted by the Board of Trustees of
the Fund with respect to lost securities. The Paying Agent may issue new
certificates in exchange for and upon the cancellation of mutilated
certificates. Any request by the Fund to the Paying Agent to issue a replacement
or new certificate pursuant to this Section 4.4 shall be deemed to be a
representation and warranty by the Fund to the Paying Agent that such issuance
will comply with such provisions of law and the By-Laws and resolutions of the
Board of Trustees of the Fund.
3.5 Disposition of Cancelled Certificates; Record Retention.
The Paying Agent shall retain all stock or share certificates which
have been cancelled in transfer or exchange and all accompanying documentation
in
16
accordance with applicable rules and regulations of the Securities and Exchange
Commission for two calendar years from the date of such cancellation. The Fund
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. The Fund, at its expense, shall cause the
Paying Agent to retain a copy of such records for a minimum additional period of
at least four calendar years from the date of delivery of the records to the
Fund and shall make such records available during this period at any time, or
from time to time, for reasonable periodic, special, or other examinations by
representatives of the Commission.
3.6 Stock or Record Books.
For so long as the Auction Agent is acting as the transfer agent for
any series of AMPS pursuant to the Agreement, it shall maintain a stock or
record book containing a list of the Holders of the AMPS of each such series. In
case of any request or demand for the inspection of the stock or record books of
the Fund or any other books in the possession of the Auction Agent, the Auction
Agent will notify the Fund and secure instructions as to permitting or refusing
such inspection. The Auction Agent reserves the right, however, to exhibit the
stock or record books or other books to any Person if (a) it is ordered to do so
by a court of competent jurisdiction or a regulatory body, judicial or
quasi-judicial agency or authority having the authority to compel such
disclosure, (b) it is advised by its counsel that its failure to do so would be
unlawful or (c) failure to do so would expose the Auction Agent to loss,
liability, claim, damage or expense for which it has not received indemnity or
security satisfactory to it.
3.7 Return of Funds.
Any funds deposited with the Auction Agent hereunder by the Fund for
any reason, including but not limited to redemption of AMPS of any series, that
remain unpaid after ninety days shall be repaid to the Fund upon the written
request of the Fund.
4. Representations and Warranties.
4.1 Representations and Warranties of the Fund
The Fund represents and warrants to the Auction Agent that:
17
(a) the Fund is a duly organized and existing statutory 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 AMPS of each series, and the
AMPS 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 Fund and constitutes the legal, valid and binding
obligation of the Fund;
(c) the form of the certificate evidencing the AMPS of each
series complies or will comply with all applicable laws of the State of its
incorporation or organization;
(d) when issued, the AMPS 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 AMPS of
each series;
(e) the execution and delivery of the Agreement and the issuance
and delivery of the AMPS 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, the By-Laws
of the Fund, any law or regulation, any order or decree of any court or public
authority having jurisdiction, or any mortgage, indenture, contract, agreement
or undertaking to which the Fund is a party or by which it is bound the effect
of which conflict, violation, default or breach would be material to the Fund or
the Fund 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 AMPS of any series.
4.2 Representations and Warranties of the Auction Agent.
The Auction Agent represents and warrants to the Fund that:
(i) The Auction Agent is duly organized and is validly existing as a
banking corporation in good standing under the laws of the State of New
York and has the corporate power to enter into and perform its obligations
under this Agreement; and
18
(ii) this Agreement has been duly and validly authorized, executed and
delivered by the Auction Agent and constitutes the legal, valid and binding
obligation of the Auction Agent, enforceable against the Auction Agent in
accordance with its terms, subject to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equitable principles.
5. The Auction Agent.
5.1 Duties and Responsibilities.
(a) The Auction Agent is acting solely as a non-fiduciary agent
for the Fund hereunder and owes no duties to any Person, other than the Fund, by
reason of this Agreement.
(b) The Auction Agent undertakes to perform such duties and only
such duties as are specifically set forth in this Agreement, and no implied
covenants or obligations shall be read into this Agreement against the Auction
Agent.
(c) In the absence of willful misconduct or gross negligence on
its part, the Auction Agent shall not be liable for any action taken, suffered,
or omitted or for any error of judgment made by it in the performance of its
duties under this Agreement. The Auction Agent shall not be liable for any error
of judgment made in good faith unless the Auction Agent shall have been grossly
negligent in ascertaining the pertinent facts.
5.2 Rights of the Auction Agent.
(a) The Auction Agent may conclusively rely and shall be
protected in acting or refraining from acting upon any communication authorized
hereby and upon any written instruction, notice, request, direction, consent,
report, certificate, share certificate or other instrument, paper or document
believed in good faith by it to be genuine. The Auction Agent shall not be
liable for acting upon any telephone communication authorized hereby which the
Auction Agent believes in good faith to have been given by the Fund or by a
Broker-Dealer. The Auction Agent may record telephone communications with the
Fund or with the Broker-Dealers or both.
19
(b) The Auction Agent may consult with counsel of its choice, and
shall have no liability for acting or refraining from acting in accordance with
advice from such counsel, except as otherwise provided for in this Agreement.
(c) The Auction Agent shall not be required to advance, expend or
risk its own funds or otherwise incur or become exposed to financial liability
in the performance of its duties hereunder. The Auction Agent shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed in writing with the Fund.
(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.
5.3 Compensation, Expenses and Indemnification.
(a) The Fund shall pay the Auction Agent an annual fee as
compensation for all services rendered by it under the Agreement and the
Broker-Dealer Agreements as the Fund and the Auction Agent have agreed to in
writing from time to time.
(b) The Fund shall reimburse the Auction Agent upon its request
for all reasonable out-of-pocket expenses, disbursements and advances incurred
or made by the Auction Agent in accordance with any provision of the Agreement
and the Broker-Dealer Agreements (including the reasonable compensation and the
reasonable expenses and disbursements of its agents and counsel), except any
expense or disbursement attributable to its negligence or bad faith. In no event
shall the Auction Agent be responsible or liable for special, indirect or
consequential loss or damage of any kind whatsoever (including, but not limited
to, loss of profit), even if the Auction Agent has been advised of the
likelihood of such loss or damage and regardless of the form of action.
(c) The Fund shall indemnify the Auction Agent for and hold it
harmless against any loss, liability or expense incurred without gross
negligence or willful misconduct on its part, arising out of or in connection
with its agency under the Agreement and the Broker-Dealer Agreements, including
the reasonable 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.
5.4 Auction Agent's Disclaimer.
20
The Auction Agent makes no representation as to the validity or
adequacy of this Agreement, the Broker-Dealer Agreements, the AMPS of any
series, or any documents related thereto, except that the Auction Agent hereby
represents that this Agreement has been duly authorized, executed and delivered
by the Auction Agent and constitutes a legal and binding obligation of the
Auction Agent. The Auction Agent shall not be responsible for or liable for any
failure or delay in the performance of its obligations under this Agreement
arising out of or caused, directly or indirectly, by circumstances beyond its
reasonable control, including, without limitation, acts of God; earthquakes;
fires; floods; wars; civil or military disturbances; sabotage; epidemics; riots;
interruptions, loss or malfunctions of utilities; computer (hardware or
software) or communications services; accidents; labor disputes; acts of civil
or military authority or governmental actions; it being understood that the
Auction Agent shall use reasonable efforts which are consistent with accepted
practices in the banking industry to resume performance as soon as practicable
under the circumstances.
6. Miscellaneous.
6.1 Term of Agreement.
(a) The term of the Agreement is unlimited unless it shall be
terminated as provided in this Section 7.1. The Fund may terminate the Agreement
at any time by so notifying the Auction Agent, provided that the Fund 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 Fund on the date specified in such notice, which date
shall be no earlier than 45 days after the date of delivery of such notice. In
the event the AMPS are no longer held in electronic book entry form, the Auction
Agent's responsibilities under the Agreement, as they relate to Auctions, shall
be suspended until such time as the AMPS are again held in book entry form.
(b) Except as otherwise provided in this paragraph (b), the
respective rights and duties of the Fund and the Auction Agent under the
Agreement with respect to any series of AMPS shall cease upon termination of the
Agreement with respect to such series. The Fund's representations, warranties,
covenants and obligations to the Auction Agent under Sections 5 and 6.3 hereof
shall survive the termination of the Agreement with respect to any series of
AMPS. Upon termination of the Agreement with respect to any series of AMPS, the
Auction Agent shall, at the Fund's request, promptly deliver to the Fund copies
of all books and records maintained by it with respect to AMPS in connection
with its duties hereunder.
21
6.2 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 and,
where appropriate, reference the particular Auction to which such notice
relates:
If to the Fund, TS&W / Claymore Tax-Advantaged Balanced Fund
c/o Claymore Advisors, LLC
000 Xxxxx Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxxx
Telecopier No.: 000-000-0000
Telephone No.: 000-000-0000
If to the Auction Agent,
The Bank of New York
Corporate Trust Administration
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Dealing & Trading Group -
Auction Desk
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Each such notice, request or communication shall be effective when
delivered at the address specified herein. Communications shall be given on
behalf of the Fund by a Fund Officer and on behalf of the Auction Agent by
telephone (confirmed by telecopy or in writing) by an Authorized Officer.
6.3 Entire Agreement.
This 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.
6.4 Benefits.
22
Nothing herein, express or implied, shall give to any Person, other
than the Fund, the Auction Agent and their respective successors and assigns,
any benefit of any legal or equitable right, remedy or claim hereunder.
6.5 Amendment; Waiver.
(a) This Agreement shall not be deemed or construed to be
modified, amended, rescinded, cancelled or waived, in whole or in part, except
by a written instrument signed by a duly authorized representative of 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.
6.6 Successors and Assigns.
This Agreement shall be binding upon, inure to the benefit of, and be
enforceable by, the respective successors and assigns of each of the Fund and
the Auction Agent. This Agreement may not be assigned by any party hereto absent
the prior written consent of the other party.
6.7 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.
6.8 Disclosure of Information.
The Auction Agent agrees that it will not disclose or use any
"non-public personal information" about the Fund's shareholders other than such
uses or disclosures as are permitted by Regulation S-P under Section 504 of the
Xxxxx-Xxxxx-Xxxxxx Act ("Regulation S-P"). "Nonpublic personal information"
about a shareholder shall mean: (i) personally identifiable financial
information; (ii) any list, description, or other grouping of consumers that is
derived from using any personally identifiable information that is not
publically available; and (iii) any other information that a Customer or the
Transfer Agent is prohibited from using or disclosing pursuant to Regulation
S-P.
6.9 Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF NEW YORK). The
23
parties agree that all actions and proceedings arising out of this
Auction
Agency Agreement or any of the transactions contemplated hereby shall be brought
in the County of New York and, in connection with any such action or proceeding,
submit to the jurisdiction of, and venue in, such County. Each of the parties
hereto also irrevocably waives all right to trial by jury in any action,
proceeding or counterclaim arising out of this
Auction Agency Agreement or the
transactions contemplated hereby.
24
TS&W / CLAYMORE
TAX-ADVANTAGED BALANCED FUND
---------------------------------
By: Name: Xxxxxxxx Xxxxxxx
Title: Trustee and Chief Legal
and Executive Officer
THE BANK OF NEW YORK, as Auction
Agent and Paying Agent
---------------------------------
By: Name:
Title:
25
EXHIBIT A
FORM OF
BROKER-DEALER AGREEMENT
A-1
EXHIBIT B
SETTLEMENT PROCEDURES
The following summary of Settlement Procedures sets forth the procedures
expected to be followed in connection with the settlement of each Auction and
will be incorporated by reference in the Broker-Dealer Agreement.
8. On each Auction Date, the Auction Agent shall notify by telephone,
facsimile or other means of electronic communication acceptable to the
Broker-Dealers that participated in the Auction held on such Auction Date
and submitted an Order on behalf of any Beneficial Owner or Potential
Beneficial Owner of:
a. the Applicable Rate fixed for the next succeeding Rate Period;
b. whether Sufficient Clearing Bids existed for the determination of the
Applicable Rate;
c. if such Broker-Dealer (a "Seller's Broker-Dealer") submitted a Bid or
Sell Order on behalf of a Beneficial Owner, the number of AMPS, if
any, to be sold by such Beneficial Owner;
d. if such Broker-Dealer (a "Buyer's Broker-Dealer") submitted a Bid on
behalf of a Potential Beneficial Owner, the number of AMPS, if any, to
be purchased by such Potential Beneficial Owner;
e. if the aggregate number of AMPS to be sold by all Beneficial Owners on
whose behalf such Broker-Dealer submitted a Bid or a Sell Order
exceeds the aggregate number of AMPS to be purchased by all Potential
Beneficial Owners on whose behalf such Broker-Dealer submitted a Bid,
the name or names of one or more Buyer's Broker-Dealers (and the name
of the Agent Member, if any, of each such Buyer's Broker-Dealer)
acting for one or more purchasers of such excess number of AMPS and
the number of such shares to be purchased from one or more Beneficial
Owners on whose behalf such Broker-Dealer acted by one or more
Potential Beneficial Owners on whose behalf each of such Buyer's
Broker-Dealers acted;
f. if the aggregate number of AMPS to be purchased by all Potential
Beneficial Owners on whose behalf such Broker-Dealer submitted a Bid
exceeds the aggregate number of AMPS to be sold by all Beneficial
Owners on whose behalf such Broker-Dealer submitted a Bid or a Sell
Order, the name or names of one or more Seller's Broker Dealers (and
the name of the Agent Member, if any, of each such Seller's
Broker-Dealer) acting for one or more sellers of such excess number of
AMPS and the number of such shares to be sold to one or more Potential
Beneficial Owners on whose
B-1
behalf such Broker-Dealer acted by one or more Beneficial Owners on
whose behalf each of such Seller's Broker-Dealers acted; and
g. the Auction Date of the next succeeding Auction with respect to the
AMPS.
9. On each Auction Date, each Broker-Dealer that submitted an Order on behalf
of any Beneficial Owner or Potential Beneficial Owner shall:
a. (i) in the case of a Broker-Dealer that is a Buyer's Broker-Dealer,
instruct each Potential Beneficial Owner on whose behalf such
Broker-Dealer submitted a Bid that was accepted, in whole or in part,
to instruct such Potential Beneficial Owner's Agent Member to pay to
such Broker-Dealer (or its Agent Member) through the Securities
Depository the amount necessary to purchase the number of AMPS to be
purchased pursuant to such Bid against receipt of such shares and
advise such Potential Beneficial Owner of the Applicable Rate for the
next succeeding Rate Period, and, (ii) in the case that the aggregate
number of AMPS to be purchased by all Potential Beneficial Owners on
whose behalf such Buyer's Broker-Dealer submitted a Bid exceeds the
aggregate number of AMPS to be sold by all Beneficial Owners on whose
behalf such Broker-Dealer submitted a Bid or a Sell Order, as
described in paragraph 1.f, then such Buyer's Broker-Dealer shall
instruct each Potential Beneficial Owner of such excess AMPS to
instruct such Potential Beneficial Owner's Agent Member to pay to the
Seller's Broker-Dealer (or its Agent Member), the names of whom are to
be provided pursuant to paragraph 1.f, through the Securities
Depository the amount necessary to purchase the number of such excess
AMPS to be purchased by such Potential Beneficial Owner against
receipt of such shares;
b. (i) in the case of a Broker-Dealer that is a Seller's Broker-Dealer,
instruct each Beneficial Owner on whose behalf such Broker-Dealer
submitted a Sell Order that was accepted, in whole or in part, or a
Bid that was accepted, in whole or in part, to instruct such
Beneficial Owner's Agent Member to deliver to such Broker-Dealer (or
its Agent Member) through the Securities Depository the number of AMPS
to be sold pursuant to such Order against payment therefor and advise
any such Beneficial Owner that will continue to hold AMPS of the
Applicable Rate for the next succeeding Rate Period, and, (ii) in the
case that the aggregate number of AMPS to be sold by all Beneficial
Owners on whose behalf such Broker-Dealer submitted a Bid or a Sell
Order exceeds the aggregate number of AMPS to be purchased by all
Potential Beneficial Owners on whose behalf such Broker-Dealer
submitted a Bid, as described in paragraph 1.e, then such Seller's
Broker-Deal shall instruct each Beneficial Owner of such excess AMPS
to instruct such Beneficial Owner's Agent Member to deliver to the
Buyer's Broker-Dealer (or its Agent Member), the names of whom are to
be provided pursuant to
B-2
paragraph 1.e, through the Securities Depository the number of AMPS to
be sold pursuant to such Order against payment therefor;
c. advise each Beneficial Owner on whose behalf such Broker-Dealer
submitted a Hold Order of the Applicable Rate for the next succeeding
Rate Period;
d. advise each Beneficial Owner on whose behalf such Broker-Dealer
submitted an Order of the Auction Date for the next succeeding
Auction; and
e. advise each Potential Beneficial Owner on whose behalf such
Broker-Dealer submitted a Bid that was accepted, in whole or in part,
of the Auction Date for the next succeeding Auction.
10. On the basis of the information provided to it pursuant to paragraph 1
above, each Broker-Dealer that submitted a Bid or a Sell Order on behalf of
a Potential Beneficial Owner or a Beneficial Owner shall, in such manner
and at such time or times as in its sole discretion it may determine,
allocate any funds received by it pursuant to 2(a) above and any AMPS
received by it pursuant to 2(b) above among the Potential Beneficial
Owners, if any, on whose behalf such Broker-Dealer submitted Bids, the
Beneficial Owners, if any, on whose behalf such Broker-Dealer submitted
Bids that were accepted or Sell Orders, and any Broker-Dealer or
Broker-Dealers identified to it by the Auction Agent pursuant to 1(e) or
1(f) above.
11. On each Auction Date:
a. each Potential Beneficial Owner and Beneficial Owner shall instruct
its Agent Member as provided in 2(a) or (b) above, as the case may be;
b. each Seller's Broker-Dealer which is not an Agent Member of the
Securities Depository shall instruct its Agent Member to (A) deliver
the shares to be sold pursuant to 2(b)(ii) above through the
Securities Depository to any Buyer's Broker-Dealer (or its Agent
Member) identified to such Seller's Broker-Dealer pursuant to 1(e)
above against payment therefor; and (B) pay through the Securities
Depository to the Agent Member of the seller of such shares against
receipt of such shares, and
c. each Buyer's Broker-Dealer which is not an Agent Member of the
Securities Depository shall instruct its Agent Member to (A) pay
through the Securities Depository to any Seller's Broker-Dealer (or
its Agent Member) identified pursuant to 1(f) above the amount
necessary to purchase the shares to be purchased pursuant to 2(a)(ii)
above against receipt of such shares, and (B) deliver such shares
through the Securities Depository to the Agent Member of the purchaser
thereof against payment therefor.
B-3
12. On the day after the Auction Date:
a. each Bidder's Agent Member referred to in 4(a) above shall instruct
the Securities Depository to execute the transactions described in
2(a) or (b) above, and the Securities Depository shall execute such
transactions;
b. each Seller's Broker-Dealer or its Agent Member shall instruct the
Securities Depository to execute the transactions described in 4(b)
above, and the Securities Depository shall execute such transactions;
and
c. each Buyer's Broker-Dealer or its Agent Member shall instruct the
Securities Depository to execute the transactions described in 4(c)
above, and the Securities Depository shall execute such transactions.
13. If any Beneficial Owner selling AMPS in an Auction fails to deliver such
AMPS (by authorized book-entry), a Broker-Dealer of any Potential
Beneficial Owner that was to have purchased AMPS in such Auction may
deliver to such Potential Beneficial Owner a number of AMPS that is less
than the number of AMPS that otherwise were to be purchased by such
Potential Beneficial Owner. In such event, the number of AMPS to be so
delivered shall be determined by such Broker-Dealer. Delivery of such
lesser number of AMPS shall constitute good delivery. Notwithstanding the
foregoing provisions of this paragraph 6, any delivery or non delivery of
AMPS which represents any departure from the results of an Auction, as
determined by the Auction Agent, shall be of no effect unless and until the
Auction Agent shall have been notified of such delivery or non-delivery in
accordance with the provisions of the
Auction Agency Agreement and the
Broker-Dealer Agreement.
B-4
EXHIBIT C
TS&W / CLAYMORE TAX-ADVANTAGED BALANCED FUND
NOTICE OF PROPOSED CHANGE OF
LENGTH OF RATE PERIOD OF
AUCTION MARKET PREFERRED SHARES
("AMPS")
TS&W / Claymore Tax-Advantaged Balanced Fund (the "Fund") may exercise
its option to designate the Rate Period of its Series ____ AMPS commencing [the
first day of the Special Rate Period] as a Special Rate Period.
By 11:00 A.M. on the second Business Day preceding the first day of
such proposed Special Rate Period, the Fund will notify ___________________ 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.
TS&W / CLAYMORE
TAX-ADVANTAGED BALANCED FUND
--------------------------
Dated: __________, 20__
C-1
EXHIBIT D
TS&W / CLAYMORE TAX-ADVANTAGED BALANCED FUND
NOTICE OF CHANGE OF LENGTH OF RATE PERIOD OF
AUCTION MARKET PREFERRED SHARES
("AMPS")
NOTICE IS HEREBY GIVEN that TS&W / Claymore Tax-Advantaged Balanced
Fund (the "Fund") has determined to designate the Rate Period of its Series ____
AMPS commencing on [the first day of the Special Rate Period] as a Special Rate
Period.
The Special Rate Period will be __________ [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 ____ AMPS 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 AMPS
shall not be held on such Auction Date for any reason or (b) an Auction for AMPS
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 AMPS 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 Xxxxx'x is rating such AMPS) and Fitch
Eligible Assets (if Fitch is rating such AMPS) each 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 Applicable Rate is the Maximum Applicable 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 Fund).
TS&W / CLAYMORE
TAX-ADVANTAGED BALANCED FUND
D-1
--------------------------
Dated: __________, 20__
D-2
EXHIBIT E
TS&W / CLAYMORE TAX-ADVANTAGED BALANCED FUND
NOTICE OF DETERMINATION NOT TO CHANGE
LENGTH OF RATE PERIOD OF
AUCTION MARKET PREFERRED SHARES
("AMPS")
NOTICE IS HEREBY GIVEN that the TS&W / Claymore Tax-Advantaged
Balanced Fund (the "Fund") has determined not to exercise its option to
designate a Special Rate Period of its Series ___ AMPS and the next succeeding
Rate Period of such series will be a [7-Day/28-Day] Rate Period of ____ days.
TS&W / CLAYMORE
TAX-ADVANTAGED BALANCED FUND
-----------------------
Dated: __________, 20___
E-1
EXHIBIT F
TS&W / CLAYMORE TAX-ADVANTAGED BALANCED FUND
NOTICE OF CURE OF FAILURE TO DEPOSIT ON
AUCTION MARKET PREFERRED SHARES
("AMPS")
NOTICE IS HEREBY GIVEN that the TS&W / Claymore Tax-Advantaged
Balanced Fund (the "Fund") has cured its failure to deposit and paid the
applicable Late Charge with respect to its Series ___ AMPS. The dividend rate on
the shares of Series ___ AMPS for the current Rate Period is _____________% per
annum, the Dividend Payment Date for the current Rate Period is scheduled to be
_______________, 20___ and the next Auction Date is scheduled to be
_______________, 20___.
TS&W / CLAYMORE
TAX-ADVANTAGED BALANCED FUND
-----------------------
Dated: __________, 20___
F-1
EXHIBIT G
TS&W / CLAYMORE TAX-ADVANTAGED BALANCED FUND
NOTICE OF FAILURE TO CURE A FAILURE TO DEPOSIT ON
AUCTION MARKET PREFERRED SHARES
("AMPS")
NOTICE IS HEREBY GIVEN that TS&W / Claymore Tax-Advantaged Balanced
Fund (the "Fund") has failed to cure its failure to deposit and/or has failed to
pay the applicable Late Charge with respect to its Series ____ AMPS. The
dividend rate on the shares of Series ___ AMPS for the current Rate Period is
_____________% per annum, the Dividend Payment Date for the current Rate Period
is scheduled to be _______________, 20___ and the next Auction Date is scheduled
to be _______________, 20___.
TS&W / CLAYMORE
TAX-ADVANTAGED BALANCED FUND
-----------------------
Dated: __________, 20___
