FORM OF MASTER BROKER-DEALER AGREEMENT
between
THE BANK OF NEW YORK
and
-------------------------
dated as of ________, 2006
Relating to
Preferred Shares ("Preferred Shares")
of
EACH OF THE XXXXX & STEERS FUNDS LISTED HEREIN
---------------------------
MASTER BROKER-DEALER AGREEMENT
Broker-Dealer Agreement dated as of _________, 2006, is between The
Bank of New York, a New York banking corporation (the "Auction Agent") (not in
its individual capacity, but solely as agent of the registered investment
companies, which are Maryland corporations, listed in Exhibit A-1 hereto, as the
same may be amended from time to time (individually, a "Fund", and together, the
"Funds," unless indicated otherwise), pursuant to authority granted to it in the
various Auction Agency Agreements between each of the Funds and the Auction
Agent (the "Auction Agency Agreements") and _________________ (together with its
successors and assigns, "BD").
The Funds have duly authorized and issued, or intend to issue
different series of shares of Auction Rate Cumulative Preferred Shares, in the
case of the of Xxxxx & Steers REIT and Utility Income Fund, Inc., Taxable
Auction Market Preferred Shares (the "Preferred Shares") or other auction market
preferred stock in the case of the Funds, all with a par value of $.001 per
share and a liquidation preference of $25,000 per share (together, the
"Preferred Shares"), pursuant to the Funds' Articles Supplementary (as defined
below).
The Funds' Articles Supplementary provides that for each subsequent
Dividend Period of Preferred Shares then outstanding, the Applicable Rate for
each series of Preferred Shares for each subsequent Dividend Period shall be
equal to the rate per annum that results from an Auction for Outstanding shares
of each Series on the respective Auction Date therefor next preceding the period
from and after the Date of Original Issue to and including the last day of the
initial Dividend Period. The Boards of Directors of the Funds have adopted
resolutions appointing The Bank of New York as Auction Agent for purposes of the
Auction Procedures, and pursuant to Section 2.5 of the Auction Agency
Agreements, the Funds have requested and directed the Auction Agent to execute
and deliver this Agreement.
The Auction Procedures require the participation of one or more
Broker-Dealers.
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NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the Auction Agent and BD agree as follows:
I. DEFINITIONS AND RULES OF CONSTRUCTION.
1.1 Terms Defined by Reference to the Articles Supplementary.
Capitalized terms not defined herein shall have the respective
meanings specified in the Articles Supplementary of each Fund.
1.2 Terms Defined Herein.
As used herein, the following terms shall have the following
meanings, unless the context otherwise requires:
(a) "Articles Supplementary" shall mean the Articles Supplementary
for Preferred Shares of each of the Funds specifying the powers, preferences and
rights of the Preferred Shares filed in the office of the State Department of
Assessments and Taxation of Maryland.
(b) "Auction" shall have the meaning specified in Section 2.1 of the
Auction Agency Agreement.
(c) "Auction Procedures" shall mean the Auction Procedures that are
set forth in Part II of the Articles Supplementary.
(d) "Authorized Officer" of the Auction Agent shall mean each Vice
President, Assistant Vice President and Assistant Treasurer of the Auction Agent
and every other officer or employee of the Auction Agent designated as an
"Authorized Officer" for purposes of this Agreement in a written communication
to BD.
(e) "BD Officer" shall mean each officer or employee of BD
designated as a "BD Officer" for purposes of this Agreement in a communication
to the Auction Agent.
(f) "Broker-Dealer Agreement" shall mean this Agreement and any
substantially similar agreement between the Auction Agent and a Broker-Dealer.
1.3 Rules of Construction.
Unless the context or use indicates another or different meaning or
intent, the following rules shall apply to the construction of this Agreement:
(a) Words importing the singular number shall include the plural
number and vice versa.
(b) The captions and headings herein are solely for convenience of
reference and shall not constitute a part of this Agreement, nor shall they
affect its meaning, construction or effect.
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(c) The words "hereof," "herein," "hereto," and other words of
similar import refer to this Agreement as a whole.
(d) All references herein to a particular time of day shall be to
New York City time.
II. NOTIFICATION OF DIVIDEND.
The provisions contained in Section 4 of Part I of the Articles
Supplementary concerning the notification of a Special Dividend Period will be
followed by the Auction Agent and BD, 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.
III. THE AUCTION.
3.1 Purpose; Incorporation by Reference of Auction Procedures.
(a) On each Auction Date, the provisions of the Auction Procedures
will be followed by the Auction Agent for the purpose of determining the
Applicable Rate for each series of Preferred Shares, for each Dividend Period.
Each periodic operation of such procedures is hereinafter referred to as an
"Auction."
(b) All of the provisions contained in the Auction Procedures are
incorporated herein by reference in their entirety and shall be deemed to be a
part of this Agreement to the same extent as if such provisions were set forth
fully herein.
(c) BD agrees to act as, and assumes the obligations of and
limitations and restrictions placed upon, a Broker-Dealer under this Agreement.
BD understands that other Persons meeting the requirements specified in the
definition of "Broker-Dealer" contained in Section 17 of Part I of the Articles
Supplementary may execute a Broker-Dealer Agreement and participate as
Broker-Dealers in Auctions.
(d) BD and other Broker-Dealers may participate in Auctions for
their own accounts. However, the Fund, by notice to BD and all other Broker
Dealers, may prohibit all Broker-Dealers from submitting Bids in Auctions for
their own accounts, provided that Broker-Dealers may continue to submit Hold
Orders and Sell Orders.
3.2 Preparation for Each Auction.
(a) Not later than 9:30 A.M. on each Auction Date for the Preferred
Shares, the Auction Agent shall advise BD by telephone or other electronic means
of communication acceptable to the parties of the Maximum Rate in effect on such
Auction Date.
(b) The Auction Agent from time to time may, but shall not be
obligated to, request BD to provide it with a list of the respective customers
BD believes are Beneficial Owners of shares of each series of Preferred Shares.
BD shall comply with any such request, and the Auction Agent shall keep
confidential any such information, including information received as to the
identity of Bidders in any Auction, and shall not disclose any such information
so provided to any Person other than a Fund; and
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such information shall not be used by the Auction Agent or its officers,
employees, agents or representatives for any purpose other than such purposes as
are described herein; 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. In the event that the Auction Agent is required to
disclose information in accordance with the foregoing sentence, it shall provide
written notice of such requirement to BD as promptly as practicable. The Auction
Agent shall, subject to the terms of the Auction Agency Agreement, transmit any
list of customers BD believes are Beneficial Owners of shares of each series of
Preferred Shares and information related thereto only to its officers,
employees, agents or representatives who need to know such information for the
purposes of acting in accordance with this Agreement, and the Auction Agent
shall prevent the transmission of such information to others and shall cause its
officers, employees, agents and representatives to abide by the foregoing
confidentiality restrictions; provided, however, that the Auction Agent shall
have no responsibility or liability for the actions of any of its officers,
employees, agents or representatives after they have left the employ of the
Auction Agent.
3.3 Auction Schedule; Method of Submission of Orders.
(a) The Funds and the Auction Agent shall conduct Auctions for each
series of Preferred Shares in accordance with the schedule set forth below. Such
schedule may be changed at any time by the Auction Agent with the consent of the
Fund, which consent shall not be withheld unreasonably. The Auction Agent shall
give notice of any such change to BD. Such notice shall be received prior to the
first Auction Date on which any such change shall be effective.
Time Event
---- -----
By 9:30 A.M. Auction Agent advises the Funds and the
Broker-Dealers of the Maximum Rate as set forth in
Section 3.2(a) hereof.
9:30 A.M. - 1:00 P.M. Auction Agent assembles information communicated to
it by Broker-Dealers as provided in Section 3(a) of
Part II of the Articles Supplementary. Submission
Deadline is 1:00 P.M.
Not earlier than 1:00 P.M. Auction Agent makes determinations pursuant to
Section 4(a) of Part II of the Articles
Supplementary.
By approximately 3:30 P.M. Auction Agent advises the Funds of the results of
the Auction as provided in Section 4(b) of Part II
of the Articles Supplementary. Submitted Bids and
Submitted Sell Orders will be accepted and
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Time Event
---- -----
rejected in whole or in part and shares of
Preferred Shares are allocated as provided in
Section 5 of Part II of the Articles Supplementary.
Auction Agent shall give notice of the Auction
results as set forth in Section 3.4(a) hereof.
The Auction Agent will follow the Bond Market Association's Market
Practice U.S. Holiday Recommendations for shortened trading days for the bond
markets (the "BMA Recommendation") unless the Auction Agent is instructed
otherwise. In the event of a BMA Recommendation on an Auction Date, the
Submission Deadline will be 11:30 a.m., instead of 1:00 p.m., and as a result
the notice set forth in Section 3.3 will occur earlier.
(b) BD agrees to maintain a list of Potential Beneficial Owners and
to contact the Potential Beneficial Owners on such list on or prior to each
Auction Date for the purposes set forth in Section 2 of Part II of the Articles
Supplementary.
(c) BD shall submit Orders to the Auction Agent in writing in
substantially the form attached hereto as Exhibit A-2. BD shall submit separate
Orders to the Auction Agent for each Potential Beneficial Owner or Beneficial
Owner on whose behalf BD is submitting an Order and shall not net or aggregate
the Orders of Potential Beneficial Owners or Beneficial Owners on whose behalf
BD is submitting Orders.
(d) BD shall deliver to the Auction Agent (i) a written notice,
substantially in the form attached hereto as Exhibit A-3, of transfers of shares
of any series of Preferred Shares, made through BD by an Existing Holder to
another Person other than pursuant to an Auction, and (ii) a written notice,
substantially in the form attached hereto as Exhibit A-4, of the failure of
Preferred Shares to be transferred to or by any Person that purchased or sold
shares of any series of Preferred Shares through BD pursuant to an Auction. The
Auction Agent is not required to accept any notice delivered pursuant to the
terms of the foregoing sentence with respect to an Auction unless it is received
by the Auction Agent by 3:00 P.M. on the Business Day next preceding the
applicable Auction Date.
3.4 Notice of Auction Results.
(a) On each Auction Date, the Auction Agent shall notify BD by
telephone or other electronic means acceptable to the parties. On the Business
Day next succeeding such Auction Date, the Auction Agent shall notify BD in
writing of the disposition of all Orders submitted by BD in the Auction held on
such Auction Date.
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(b) BD shall notify each Beneficial Owner, Potential Beneficial
Owner, Existing Holder or Potential Holder on whose behalf BD has submitted an
Order, and take such other action as is required of BD.
If any Beneficial Owner or Existing Holder selling shares of any
series of Preferred Shares in an Auction fails to deliver such shares, the
Broker-Dealer of any Person that was to have purchased shares of any series of
Preferred Shares in such Auction may deliver to such Person a number of whole
shares of the series of Preferred Shares that is less than the number of shares
that otherwise was to be purchased by such Person. In such event, the number of
shares of the series of Preferred Shares to be so delivered shall be determined
by such Broker-Dealer. Delivery of such lesser number of shares shall constitute
good delivery. Upon the occurrence of any such failure to deliver shares, such
Broker-Dealer shall deliver to the Auction Agent the notice required by Section
3.3(d)(ii) hereof. Notwithstanding the foregoing terms of this Section 3.4(b),
any delivery or non-delivery of shares of any series of Preferred Shares which
represents any departure from the results of an Auction, as determined by the
Auction Agent, shall be of no effect unless and until the Auction Agent shall
have been notified of such delivery or non-delivery in accordance with the terms
of Section 3.3(d) hereof. The Auction Agent shall have no duty or liability with
respect to enforcement of this Section 3.4(b).
3.5 Service Charge to be Paid to BD.
On the Business Day next succeeding each Auction Date, the Auction
Agent shall pay to BD from moneys received from the Funds an amount equal to:
(a) in the case of any Auction Date immediately preceding a Dividend Period of
less than one year, the product of (i) a fraction the numerator of which is the
number of days in such Dividend Period (calculated by counting the first day of
such Dividend Period but excluding the last day thereof) and the denominator of
which is 360, times (ii) 1/4 of 1%, times (iii) $25,000, times (iv) the sum of
(A) the aggregate number of shares of any series of Preferred Shares placed by
BD in the applicable Auction that were (x) the subject of a Submitted Bid of a
Beneficial Owner submitted by BD and continued to be held as a result of such
submission and (y) the subject of a Submitted Bid of a Potential Beneficial
Owner submitted by BD and were purchased as a
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result of such submission plus (B) the aggregate number of shares of any series
of Preferred Shares subject to valid Hold Orders (determined in accordance with
Section 2 of Part II of the Articles Supplementary) submitted to the Auction
Agent by BD plus (C) the number of shares of any series of Preferred Shares
deemed to be subject to Hold Orders by Beneficial Owners pursuant to Section 2
of Part II of the Articles Supplementary that were acquired by BD for its own
account or were acquired by such Beneficial Owners through BD; and (b) in the
case of any Auction Date immediately preceding a Special Dividend Period of one
year or longer, that amount as mutually agreed upon by the Funds and BD, based
on the selling concession that would be applicable to an underwriting of fixed
or variable rate Preferred Shares with a similar final maturity or variable rate
dividend period, at the commencement of such Special Dividend Period.
For purposes of subclause (a)(iv)(C) of the foregoing sentence, if
any Beneficial Owner who acquired shares of any series of Preferred Shares
through BD transfers those shares to another Person other than pursuant to an
Auction, then the Broker-Dealer for the shares so transferred shall continue to
be BD, provided, however, that if the transfer was effected by, or if the
transferee is, a Broker-Dealer other than BD, then such Broker-Dealer shall be
the Broker-Dealer for such shares.
IV. MISCELLANEOUS.
4.1 Termination.
Any party may terminate this Agreement at any time upon five days'
prior written notice to the other party; provided, however, that if the
Broker-Dealer is ________________________ neither _________________________ nor
the Auction Agent may terminate this Agreement without first obtaining the prior
written consent of the Fund to such termination, which consent shall not be
withheld unreasonably. This Agreement shall automatically terminate upon the
redemption of all outstanding Preferred Shares or upon termination of the
Auction Agent Agreement.
4.2 Force Majeure
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Neither party to this Agreement shall be responsible or liable for any
failure or delay in the performance of its obligations under this Agreement
arising out of or caused, directly or indirectly, by circumstances beyond its
reasonable control, including, without limitation, acts of God; earthquakes;
fires; floods; wars; civil or military disturbances; sabotage; epidemics; riots;
acts of terrorism; interruptions, loss or malfunctions or 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 parties shall use reasonable efforts which are consistent with accepted
practices in the banking industry to resume performance as soon as practicable
under the circumstances.
4.3 Participant in Securities Depository; Payment of Dividends in Same-Day
Funds.
(a) BD is, and shall remain for the term of this Agreement, a member
of, or a participant in, the Securities Depository (or an affiliate of such a
member or participant).
(b) BD represents that it (or if BD does not act as Agent Member,
one of its affiliates) shall make all dividend payments on the shares of any
series of Preferred Shares available in same-day funds on each Dividend Payment
Date to customers that use BD (or its affiliate) as Agent Member.
4.4 Agent Member.
At the date hereof, BD is a participant of the Securities
Depository.
4.5 Communications.
Except for (i) communications authorized to be made by telephone
pursuant to this Agreement or the Auction Procedures and (ii) communications in
connection with the Auctions (other than those expressly required to be in
writing), all notices, requests and other communications to any party hereunder
shall be in writing (including telecopy or similar writing) and shall be given
to such party at its address or telecopier number set forth below:
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If to the Auction Agent, The Bank of New York
addressed to: Corporate Trust Administration
000 Xxxxxxx Xxxxxx, Xxxxx 0X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Dealing and Trading Group - Auction Desk
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
If to the BD,
addressed to:
or such other address or telecopier number as such party hereafter may
specify for such purpose by notice to the other party. Each such notice,
request or communication shall be effective when delivered at the address
specified herein. Communications shall be given on behalf of BD by a BD
Officer and on behalf of the Auction Agent by an Authorized Officer. BD
may record telephone communications with the Auction Agent.
4.6 Entire Agreement.
This Agreement contains the entire agreement between the parties relating
to the subject matter hereof, and there are no other representations,
endorsements, promises, agreements or understandings, oral, written or implied,
between the parties relating to the subject matter hereof.
4.7 Benefits.
Nothing in this Agreement, express or implied, shall give to any person,
other than the Funds, the Auction Agent and BD and their respective successors
and permitted assigns, any benefit of any legal or equitable right, remedy or
claim under this Agreement.
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4.8 Amendment; Waiver.
(a) This Agreement shall not be deemed or construed to be modified,
amended, rescinded, canceled or waived, in whole or in part, except by a written
instrument signed by a duly authorized representative of the party to be
charged.
(b) Failure of either party to this Agreement to exercise any right
or remedy hereunder in the event of a breach of this Agreement by the other
party shall not constitute a waiver of any such right or remedy with respect to
any subsequent breach.
4.9 Successors and Assigns.
This Agreement shall be binding upon, inure to the benefit of, and be
enforceable by, the respective successors and permitted assigns of each of BD
and the Auction Agent. This Agreement may not be assigned by either party hereto
absent the prior written consent of the other party.
4.10 Severability.
If any clause, provision or section of this Agreement shall be ruled
invalid or unenforceable by any court of competent jurisdiction, the invalidity
or unenforceability of such clause, provision or section shall not affect any
remaining clause, provision or section hereof.
4.11 Execution in Counterparts.
This Agreement may be executed in several counterparts, each of
which shall be an original and all of which shall constitute but one and the
same instrument.
4.12 Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York applicable to agreements made and to be
performed in said state.
4.13 Jurisdiction.
The parties agree that all actions and proceedings arising out of
this Broker-Dealer 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 Agreement or the
transactions contemplated hereby.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the date first above written.
THE BANK OF NEW YORK, As Auction Agent
By:
---------------------------------
Name:
Title:
[INSERT NAME OF BD]
By:
---------------------------------
Name:
Title:
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EXHIBIT A-1
LIST OF FUNDS
(revised _________, 2006)
Xxxxx & Steers Advantage Income Realty Fund, Inc.
Xxxxx & Steers Premium Income Realty Fund, Inc.
Xxxxx & Steers Quality Income Realty Fund, Inc.
Xxxxx & Steers REIT and Preferred Income Fund, Inc.
Xxxxx & Steers REIT and Utility Income Fund, Inc.
Xxxxx & Steers Select Utility Fund, Inc.
Xxxxx & Steers Worldwide Realty Income Fund, Inc.
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EXHIBIT X-0
XXX XXXX XX XXX XXXX
AUCTION BID FORM
Submit To: Issue:
--------- -----
The Bank of New York ____________________________________
Corporate Trust Administration ______________________________
000 Xxxxxxx Xxxxxx, Xxxxx 0X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Dealing and Trading Group -
Auction Desk
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
The undersigned Broker-Dealer submits the following Order on behalf of the
Bidder listed below:
Name of Bidder: ______________________
BENEFICIAL OWNER
Shares of Series now held __________________ HOLD______________
BID at rate of___________
SELL ______________
POTENTIAL BENEFICIAL OWNER
# of shares of Series___________
BID at rate of___________ Notes:
(1) If submitting more than one Bid for one Bidder, use additional
Auction Bid Forms.
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(2) If one or more Bids covering in the aggregate more than the
number of outstanding shares held by any Beneficial Owner are
submitted, such bid shall be considered valid in the order of
priority set forth in the Auction Procedures on the above
issue.
(3) A Hold or Sell Order may be placed only by a Beneficial Owner
covering a number of shares not greater than the number of
shares currently held.
(4) Potential Beneficial Owners may make only Bids, each of which
must specify a rate. If more than one Bid is submitted on
behalf of any Potential Beneficial Owner, each Bid submitted
shall be a separate Bid with the rate specified.
(5) Bids may contain no more than three figures to the right of
the decimal point (.001 of 1%). Fractions will not be
accepted. (6) An Order must be submitted in whole shares of
Preferred Shares with an aggregate liquidation preference of
$25,000.
________________________________________
_______________________________
Authorized Signature __________
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EXHIBIT A-3
(Note: To be used only for transfers made other than pursuant to an Auction)
TRANSFER FORM
Re: _________________________________________________________________
("AMPS")
We are (check one):
[ ] the Existing Holder named below;
[ ] the Broker-Dealer for such Existing Holder; or
[ ] the Agent Member for such Existing Holder.
We hereby notify you that such Beneficial Owner has transferred
_________ Series [ ] AMPS to
___________________________
(Name of Existing Holder)
___________________________
(Name of Broker-Dealer)
___________________________
(Name of Agent Member)
By: _______________________________________
Printed Name:
Title:
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EXHIBIT A-4
(Note: To be used only for failures to deliver or to pay for
Preferred Shares sold pursuant to an Auction)
NOTICE OF A FAILURE TO DELIVER
We are a Broker-Dealer for _____________________ (the "Purchaser"),
which purchased _______ Preferred Shares of ____________________________ in the
Auction held on ____________________ from the seller of such shares.
We hereby notify you that (check one):
______ the Seller failed to deliver such shares to the Purchaser.
______ the Purchaser failed to make payment to the Seller upon delivery of such
shares.
Name:
_____________________
By:
_____________________
Printed Name:
Title:
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EXHIBIT B
(Note: To be used only for transfers made other than pursuant to an Auction)
TRANSFER FORM
Re: XXXXX & STEERS REIT AND UTILITY INCOME FUND, INC.
Auction Rate Preferred Shares ("AMPS")
We are (check one):
[ ] the Existing Holder named below;
[ ] the Broker-Dealer for such Existing Holder; or
[ ] the Agent Member for such Existing Holder.
We hereby notify you that such Beneficial Owner has transferred
___________ Series [ ] AMPS to ____________________.
___________________________
(Name of Existing Holder)
___________________________
(Name of Broker-Dealer)
___________________________
(Name of Agent Member)
By: ___________________
Printed Name:
Title:
X-0
Xxxxxxx Xxxxxx Xxxxxxxxx - XXX 0000
EXHIBIT C
(Note: To be used only for failures to deliver or to pay for
Preferred Shares sold pursuant to an Auction)
NOTICE OF A FAILURE TO DELIVER
We are a Broker-Dealer for ___________________ (the "Purchaser"),
which purchased ________ Series [ ] Preferred Shares of XXXXX & STEERS REIT AND
UTILITY INCOME FUND, INC. in the Auction held on _____________________ from the
seller of such shares.
We hereby notify you that (check one):
_____ the Seller failed to deliver such shares to the Purchaser.
_____ the Purchaser failed to make payment to the Seller upon
delivery of such shares.
Name: _______________________
(Name of Broker-Dealer)
By: _________________________
Printed Name:
Title:
