Exhibit K4
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BROKER-DEALER AGREEMENT
between
BANKERS TRUST COMPANY
and
XXXXXX BROTHERS INC.
Relating to
AUCTION TERM PREFERRED STOCK
of
THE NEW AMERICA HIGH INCOME FUND, INC.
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BROKER-DEALER AGREEMENT dated as of May 6, 1997 between BANKERS
TRUST COMPANY (the "Auction Agent"), a New York banking corporation (not in its
individual capacity but solely as agent of The New America High Income Fund,
Inc. (the "Fund") pursuant to authority granted it in the Auction Agent
Agreement, and XXXXXX BROTHERS INC. (together with its successors and assigns,
the "BD").
The Fund has currently issued two series of shares of Auction Term
Preferred Stock, par value $1.00 per share, liquidation preference $50,000 per
share, and proposes to designate a third series of shares of Auction Term
Preferred Stock, par value $1.00 per share, liquidation preference $25,000 per
share, pursuant to its Articles of Incorporation, as amended, and the Articles
Supplementary establishing each such series. In the event that the Fund
establishes one or more additional series of Auction Term Preferred Stock to
which it desires that this Agreement be applicable, the Fund shall so notify the
BD in writing. If the BD is willing to render such services on the terms
provided for herein, it shall notify the Fund in writing, whereupon such series
of Auction Term Preferred Stock (such series, together with the Auction Term
Preferred Stock then subject to this Agreement, the "ATP") shall become subject
to this Agreement.
The Articles Supplementary will provide that, for each Dividend
Period of any series of ATP then outstanding, the Applicable Rate for such
series for such Dividend Period shall, under certain conditions, be the rate per
annum that a bank or trust company appointed by the Fund advises results from
implementation of the Auction Procedures for such series. The Board of Directors
has adopted a resolution appointing Bankers Trust Company as Auction Agent for
purposes of the Auction Procedures for each series of ATP
The Auction Procedures contemplate the participation of one or more
Broker-Dealers for each series of ATP.
NOW THEREFORE, in consideration of the premises and the mutual
covenants contained herein the Auction Agent and BD agree as follows:
1. Definitions and Rules of Construction.
1.1 Terms Defined by Reference to Articles Supplementary. Capitalized
terms not defined herein shall have the respective meanings specified in the
Articles Supplementary.
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) "Articles Supplementary" shall mean the Articles
Supplementary authorizing the issuance of the relevant series of ATP filed by
the Fund with the office of the secretary of the State of Maryland.
(b) "Auction" shall have the meaning specified in Section
2.1 hereof.
(c) "Auction Agent Agreement" shall mean any Auction Agent
Agreement between the Fund and the Auction Agent relating to the ATP.
(d) "Auction Procedures" shall mean the auction procedures
constituting Part II of the Articles Supplementary.
(e) "Authorized Officer" shall mean each Senior Vice
President, Vice President, Assistant Vice President, Trust officer, Assistant
Treasurer and Assistant Secretary of the Auction Agent assigned to its Corporate
Trust and Agency Group and every other officer or employee of the Auction Agent
designated as an "Authorized Officer" for purposes of this Agreement in a
communication to the BD.
(f) "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.
(g) "Broker-Dealer Agreement" shall mean this Agreement and
any substantially similar agreement between the Auction Agent and a
Broker-Dealer.
(h) "Existing Holder" shall have the meaning set forth in
the Articles Supplementary, and for purposes of this Broker-Dealer Agreement and
with respect to the Auction Procedures as referred to in this Agreement, shall
also include, as the circumstances may require, a Person who is listed as the
beneficial owner of ATP in the records of a Broker-Dealer.
(i) "Master Purchaser's Letter" means a letter
substantially in the form of or containing provisions similar to those in the
form attached hereto as Exhibit A, which is required to be executed by (1) each
prospective purchaser of shares of ATP or (2) the Broker- Dealer through whom
such shares will be held.
(j) "Potential Holder" shall have the meaning set forth in
the Articles Supplementary, and for purposes of this Broker-Dealer Agreement and
with respect to the Auction Procedures as referred to in this Agreement, shall
also include, as the circumstances may require, any other Person, including any
Existing Holder of shares of ATP, who may be interested in acquiring shares of
ATP (or, in the case of an Existing Holder, additional shares of ATP).
(k) "Settlement Procedures" shall mean the Settlement
Procedures attached hereto as Exhibit B.
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.
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(b) The captions and headings herein are solely for the
convenience of reference and shall not constitute a part of this Agreement nor
shall they affect its meaning, construction or effect.
(c) The words "hereof", "herein", "hereto", and other words
of similar import refer to this agreement as a whole.
(d) All references herein to a particular time of day shall
be to New York City time.
2. The Auction.
2.1 Purposes; Incorporation by Reference of Auction Procedures
and Settlement Procedures.
(a) The provisions of the Auction Procedures will be
followed by the Auction Agent for the purposes of determining the Applicable
Rate for any Dividend Period of any series of ATP for which the Applicable Rate
is to be determined by an Auction. Each periodic operation 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.
(c) Before any series of the ATP becomes subject to this
Broker-Dealer Agreement, the BD shall have delivered a Master Purchaser's Letter
executed by the BD. The BD agrees to act as, and assumes the obligations of, and
limitations and restrictions placed upon, a Broker-Dealer under this Agreement
for each series of ATP. The BD shall act as the exclusive Broker-Dealer for the
Fund until the later of (i) January 30, 1998 and (ii) such date on which the
Fund appoints one or more additional Broker-Dealers. The BD understands that,
subject to the preceding sentence, other Persons meeting the requirements
specified in the definition of "Broker-Dealer" contained in the Auction
Procedures may execute Broker-Dealer Agreements and Master Purchaser's Letters
and participate as Broker-Dealers in Auctions.
2.2 Preparation of Each Auction.
(a) Not later than 9:30 A.M. on each Auction Date for the
ATP, the Auction Agent shall advise the Broker-Dealers for such series by
telephone of the Maximum Applicable Rate therefor and the AA Composite
Commercial Paper Rate(s) and the Treasury Index Rate(s), as the case may be,
used in determining the Maximum Applicable Rate.
(b) In the event that any Auction Date for the ATP shall be
changed after the Auction Agent has given the notice referred to in clause (vi)
of paragraph (a) of the Settlement Procedures, or after the notice referred to
in Section 2.5(a) hereof, if applicable,
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the Auction Agent, by such means as the Auction Agent deems practicable shall
give notice of such change to the BD not later than the earlier of 9:15 A.M. on
the new Auction Date or 9:15 A.M. on the old Auction Date. Thereafter, the BD
shall notify customers of the BD who the BD believes are Existing Holders of
shares of ATP of such change in the Auction Date.
(c) The Auction Agent from time to time may request the
Broker-Dealers to provide the Auction Agent with a list of their respective
customers that such Broker-Dealers believe are Existing Holders of shares of
ATP. BD shall comply with any such request, and the Auction Agent shall keep
confidential any such information so provided by BD and shall not disclose any
information so provided by BD to any Person other than the Fund and BD.
(d) The Auction Agent is not required to accept the Master
Purchaser's Letter of any Potential Holder who wishes to submit an Order for the
first time in an Auction or of any Potential Holder or Existing Holder who
wishes to amend its Master Purchaser's Letter unless such letter or amendment is
received by the Auction Agent by 3:00 P.M. on the Business Day preceding such
Auction.
2.3 Auction Schedule; Method of Submission of Order.
(a) The Fund and the Auction Agent shall conduct
Auctions for ATP in accordance with the schedule set forth below. Such schedule
may be changed by the Auction Agent with the consent of the Fund, which consent
shall not be unreasonably withheld or delayed. 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 preceding the first
Auction Date on which such change shall be effective.
Time Event
By 9:30 A.M. Auction Agent advises Fund and the
Broker-Dealers of the Maximum Applicable
Rate and the AA Composite Commercial Paper
Rate(s) and the Treasury Index Rate(s), as
the case may be, used in determining such
Maximum Applicable Rate as set forth in
Section 2.2(a) hereof, with respect to the
relevant series of ATP.
9:30 A.M. - 1:00 P.M. Auction Agent assembles information
communicated to it by Broker-Dealers as
provided in Section 4(a) of the Auction
Procedures. Submission Deadline is 1:00
P.M.
Not earlier than 1:00 P.M. Auction Agent makes determination pursuant
to Section 5(a) of the Auction Procedures.
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By approximately 3:00 P.M. Auction Agent advises the Fund of results
of Auction as provided in Section 5(b) of
the Auction Procedures. Submitted Orders
are accepted and rejected and shares of
ATP of the respective series allocated as
provided in Section 6 of the Auction
Procedures. Auction Agent gives notice of
Auction results as set forth in Section
2.4(a) hereof.
(b) BD agrees to maintain a list of Potential Holders and
to contact the Potential Holders on such list whom the BD believes may be
interested in participating in the Auction on such Auction Date on or prior to
such Auction Date for the purposes set forth in the Auction Procedures. To the
extent required under the Securities Act of 1933, as amended, or the rules and
regulations promulgated thereunder, BD shall deliver a Prospectus to each such
Potential Holder. BD agrees, upon the request of a Potential Holder, to deliver
to such Potential Holder either (i) a Prospectus with such legends or stamps
regarding non-reliance by Potential Holders of certain information therein
(other than with respect to information concerning the ATP and Settlement and
Auction Procedures) as XX xxxxx appropriate or (ii) the Fund's summary
description of the ATP and the Settlement Procedure and Auction Procedures.
(c) BD shall submit Orders to the Auction Agent in writing
substantially in the form attached hereto as Exhibit C. BD shall submit a
separate Order to the Auction Agent for each Potential Holder or Existing Holder
on whose behalf BD is submitting an Order and shall not net or aggregate the
Orders of different Potential Holders or Existing Holders 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 D, of transfers of
shares of ATP made by or through BD by an Existing Holder to another Person
other than pursuant to an Auction and shall deliver or cause to be delivered the
related Master Purchaser's Letter executed by such Person if such Person will be
listed as the holder of such shares on the books of the Auction Agent and such
Person has not previously so delivered a Master Purchaser's Letter and (ii) a
written notice, substantially in the form attached hereto as Exhibit E, of the
failure of any shares of ATP to be transferred to or by any Person that
purchased or sold shares of ATP through BD pursuant to an Auction if such
Person's shares were to be or were listed in the Person's name on the books of
the Auction Agent. 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.
(e) BD and other Broker-Dealers which have delivered duly
executed Master Purchaser's Letters may submit Orders in Auctions for their own
accounts unless the Fund shall have notified BD and all other Broker-Dealers
that they may no longer do so, in
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which case Broker-Dealers may continue to submit Hold Orders and Sell Orders for
their own accounts.
(f) BD agrees to handle its customers' Orders in accordance
with its duties under applicable securities laws and rules.
(g) To the extent that pursuant to Section 6 of the Auction
Procedures, BD continues to hold, sells, or purchases a number of shares that is
fewer than the number of shares in an Order submitted by BD to the Auction Agent
on behalf of Existing or Potential Holders whose shares are or will be held in
BD's name, BD shall make appropriate pro rata allocations among such Existing or
Potential Holders. If as a result of such allocations, any Potential Holder
would be entitled or required to sell, or any Potential Holder would be entitled
or required to purchase, a fraction of a share of ATP on any Auction Date, BD
shall, in such manner as it shall determine in its sole discretion, round up or
down the number of shares of ATP to be purchased or sold on such Auction Date by
any Existing Holder or Potential Holder on whose behalf BD submitted an Order so
that the number of shares so purchased or sold by each such Existing Holder or
Potential Holder on such Auction Date shall be whole shares of ATP.
2.4 Notices of Auction Results.
(a) On each Auction Date for ATP, the Auction Agent shall
notify BD by telephone of he results of the Auction as set forth in paragraph
(a) of the Settlement Procedures. As soon as reasonably practicable, the Auction
Agent shall confirm to BD in writing the disposition of all Orders submitted by
BD in such Auction.
(b) BD shall notify each Existing Holder or Potential
Holder on whose behalf BD has submitted an Order as set forth in paragraph (a)
of the Settlement Procedures and take such other action as is required of BD
pursuant to the Settlement Procedures.
2.5 Designation of Alternate Term Period.
(a) If the Fund delivers to the Auction Agent a notice of
the Auction Date for any series of ATP for a Dividend Period thereof that next
succeeds a Dividend Period that is not a Standard Term Period in the form of
Exhibit E to the Auction Agent Agreement, the Auction Agent shall deliver such
notice to BD as promptly as practicable after its receipt of such notice from
the Fund.
(b) If the Board of Directors proposes to designate any
succeeding Dividend Period of any series of ATP as an Alternate Term Period and
the Fund delivers to the Auction Agent a notice of such proposed Alternate Term
Period in the form of Exhibit F to the Auction Agent Agreement, the Auction
Agent shall deliver such notice to BD as promptly as practicable after its
receipt of such notice from the Fund.
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(c) If the Board of Directors determines to designate such
succeeding Dividend Period as an Alternate Term Period and the Fund delivers to
the Auction Agent a notice of such Period in the form of Exhibit G to the
Auction Agent Agreement not later than 3:00 p.m. on the second Business Day next
preceding the first day of such proposed Alternate Term Period, the Auction
Agent shall deliver such notice to BD not later than 3:00 p.m. on such Business
Day.
(d) If the Fund shall deliver to the Auction Agent a notice
not later than 3:00 p.m. on the second Business Day next preceding the first day
of any Dividend Period stating that the Fund has determined not to exercise its
option to designate such succeeding Dividend Period as an Alternate Term Period,
in the form of Exhibit H to the Auction Agent Agreement, or shall fail to timely
deliver either such notice or a notice in the form of Exhibit G to the Auction
Agent Agreement, the Auction Agent shall deliver a notice in the form of Exhibit
H to the Auction Agent Agreement to BD not later than 3:00 p.m. on such Business
Day.
2.6 Service Charge to be Paid to BD.
On the Business Day next succeeding each Auction Date for
any series of ATP, the Auction Agent shall pay to BD from moneys received from
the Fund an amount equal to (a)(i) in the case of any Auction Date for any
series of ATP immediately preceding a Dividend Period of such series consisting
of less than one year, 1/4 of 1% unless otherwise advised by the Fund in writing
or (ii) in the case of any Auction Date immediately preceding a Dividend Period
of such series consisting of one year or more, a percentage agreed upon in
writing by the Fund and the Broker-Dealers times (b) a fraction, the numerator
of which is the number of days in the Dividend Period for such series beginning
on such Business Day and the denominator of which is 360, times (c) the
liquidation preference per share for such series times (d) the aggregate number
of Outstanding shares of such series placed by BD in such Auction (for this
purpose shares will be deemed placed by BD if such shares were (i) the subject
of Hold Orders deemed to have been made by Existing Holders and were acquired by
such Existing Holders through BD or (ii) the subject of an Order submitted by BD
that is (A) a Submitted Order of an Existing Holder that resulted in such
Existing Holder continuing to hold such shares as a result of the Auction or (B)
a Submitted Order of a Potential Holder that resulted in such Potential Holder
purchasing such shares as a result of the Auction or (C) a valid Hold Order;
provided that in the event an Auction scheduled to occur on an Auction Date
fails to occur for any reason while the ATP remains Outstanding, BD will be
entitled to service charges as if the Auction had occurred and all Holders of
shares placed by them submitted valid Hold Orders).
For purposes of subclause (d)(i) of the foregoing paragraph, if any
Existing Holder who acquired shares of any series of ATP through BD transfers
those shares to another Person other than pursuant to an Auction, then such
Existing Holder shall be deemed to have acquired such shares through BD unless
the transfer was affected by, or transferee is, a Broker-Dealer other than BD.
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2.7 Settlement.
(a) If any Existing Holder on whose behalf the BD submitted
a Hold/Sell Order that was accepted as a Sell Order or a Sell Order that was
accepted, in either case, in whole or in part, fails to instruct its Agent
Member to deliver the shares of ATP with respect to which such Order was
accepted against payment therefor, the BD shall instruct such Agent Member to
deliver such shares against payment therefor. If (i) any Existing Holder on
whose behalf a Broker-Dealer other than the BD has submitted a Hold/Sell Order
that was accepted as a Sell Order or a Sell Order that was accepted, in either
case, in whole or in part, fails to instruct its Agent Member to so deliver the
shares of ATP with respect to which such Order was accepted against payment
therefor, (ii) such other Broker-Dealer fails to instruct such Existing Holder's
Agent Member to deliver such shares and (iii) such Existing Holder is identified
to BD by the Auction Agent as provided in Section (a) (v) of the Settlement
Procedures as an Existing Holder from whom a Potential Holder on whose behalf BD
submitted a Buy Order is to purchase such shares, BD may deliver to such
Potential Holder a number of shares of ATP that is less than the number of
shares of ATP to be purchased by such Potential Holder by the number of shares
to be purchased from such Existing Holder. Notwithstanding the foregoing terms
of this Section 2.7, any delivery or non-delivery of shares of ATP which
represents any departure from the results of an Auction for such series, as
determined by the Auction Agent, shall be of no effect unless and until the
Auction Agent shall have been notified of such delivery or non-delivery in
accordance with the terms of Section 2.3(d)(ii) hereof. The Auction Agent shall
have no duty or liability with respect to enforcement of this Section 2.7.
(b) Neither the Auction Agent nor the Fund shall have any
responsibility of liability with respect to the failure of an Existing Holder or
a Potential Holder or its Agent Member to deliver shares of ATP of any series or
to pay for shares of ATP of any series sold or purchased pursuant to the Auction
Procedures or otherwise.
3. The Auction Agent.
3.1 Duties and Responsibilities.
(a) The Auction Agent is acting solely as agent for the
Fund hereunder and owes no fiduciary duties to any other 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 bad faith or negligence on its part,
the Auction Agent shall not be liable for any action taken, suffered, or omitted
or for any error of judgment made by it in the performance of its duties under
this Agreement. The Auction Agent shall not be
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liable for any error or judgment made in good faith unless the Auction Agent
shall have been negligent in ascertaining the pertinent facts.
3.2 Rights of the Auction Agent.
(a) The Auction Agent may rely and shall be protected in
acting or refraining from acting upon any communication authorized hereby and
upon any written instruction, notice, request, direction, consent, report,
certificate, share certificate or other instrument, paper or document believed
in good faith by it to be genuine. The Auction Agent shall not be liable for
acting upon any telephone communication authorized by this Agreement 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
Broker-Dealers.
(b) The Auction Agent may consult with counsel of its
choice and the advice of such counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon.
(c) The Auction Agent shall not be required to advance,
expend or risk its own funds or otherwise incur or become exposed to financial
liability in the performance of its duties hereunder.
3.3 Auction Agent's Disclaimer. The Auction Agent makes no
representation as to the validity of adequacy of this Agreement, the Auction
Agent Agreement or the shares of ATP of any series.
4. Miscellaneous.
4.1 Termination. Either party may terminate this Agreement at any
time on five (5) days notice to the other party, provided that neither BD nor
the Auction Agent may terminate this Agreement without first obtaining prior
written consent of the Fund to such termination, which consent shall not be
unreasonably withheld. This Agreement shall automatically terminate upon the
termination of the Auction Agent Agreement.
4.2 Participant in Securities Depository. BD is, and shall remain for
the term of this Agreement, a member of, or participant in, the Securities
Depository (or an affiliate of such a member participant).
4.3 Communications. Except (i) communications authorized to be by
telephone by this 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 addressed or telecopy number set forth below:
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If to BD, addressed: Xxxxxx Brothers Inc.
3 World Financial Center
000 Xxxxx Xxxxxx 0xx xxxxx
Xxx Xxxx, XX 00000-0000
If to the Auction Agent,
addressed: Bankers Trust Company
Four Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Auction Rate/Remarketed
Securities
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
or such other address or telecopy number as such party may hereafter specify for
such purpose by notice to the other parties. Each such notice, request or
communication shall be effective when delivered at the address specified herein.
Communications shall be given on behalf of BD by a BD Officer and on behalf of
the Auction Agent by an Authorized Officer. BD may record telephone
communications with the Auction Agent.
4.4 Entire Agreement. This Agreement contains the entire agreement
among the parties hereto relating to the subject matter hereof, and there are no
other representations, endorsements, promises, agreements or understandings,
oral, written or implied, among the parties hereto relating to the subject
matter hereof. This Agreement supersedes and terminates all prior Broker-Dealer
Agreements between the parties.
4.5 Benefits. Nothing in this Agreement, express or implied, shall
give to any person, other than the Fund, the Auction Agent, BD and their
respective successors and assigns, any benefit of any legal or equitable right,
remedy or claim hereunder.
4.6 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 any party hereto to exercise any right or
remedy hereunder in the event of a breach hereof by any other party shall not
constitute a waiver of any such right or remedy with respect to any subsequent
breach.
4.7 Successors and Assigns. This Agreement shall be binding upon,
inure to the benefit of, and be enforceable by, the respective successors and
assigns of each of the Auction Agent and BD. This Agreement may not be assigned
by either party hereto absent the prior written consent of the other party;
provided, however, that this Agreement may be assigned by
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the Auction Agent to a successor Auction Agent selected by the Fund without the
consent of BD.
4.8 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 thereof.
4.9 Execution in Counterparts. This Agreement may be executed in
several counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
4.10 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York applicable to agreements
made and to be performed in said State.
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.
BANKERS TRUST COMPANY
By: /s/ Xxxxxxx Xxxxxxxx
______________________________
Name: Xxxxxxx Reymonds
Title: AT
XXXXXX BROTHERS INC.
By: /s/ Xxxx Xxxxxxx
______________________________
Name:
Title:
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EXHIBIT A
MASTER PURCHASER'S LETTER
Relating to
Securities Involving Rate Settings
Through Auctions or Remarketings
THE COMPANY
A REMARKETING AGENT
THE AUCTION AGENT
A BROKER-DEALER
AN AGENT MEMBER
OTHER PERSONS
Dear Sirs:
1. This letter is designed to apply to publicly or privately offered
debt or equity securities ("Securities") of any issuer ("Company") which are
described in any final prospectus or other offering materials relating to such
Securities as the same may be amended or supplemented (collectively, with
respect to the particular Securities concerned, the "Prospectus") and which
involve periodic rate settings through auctions ("Auctions") or procedures
("Remarketings"). This letter shall be for the benefit of any Company and of any
auction agent, paying agent (collectively, "auction agent"), remarketing agent,
broker-dealer, agent member, securities depository or other interested person in
connection with any Securities and related Auctions or Remarketings (it being
understood that such persons may be required to execute specified agreements and
nothing herein shall alter such requirements). The terminology used herein is
intended to be general in its application and not to exclude any Securities in
respect of which (in the Prospectus or otherwise) alternative terminology is
used.
2. We may from time to time offer to purchase, purchase, offer to
sell and/or sell Securities of any Company as described in the Prospectus
relating thereto. We agree that this letter shall apply to all such purchases,
sales and offers and to Securities owned by us. We understand that the
dividend/interest rate on Securities may be based from time to time on the
results of Auctions or Remarketings as set forth in the Prospectus.
3. We agree that any bid or sell order placed by us in an Auction or
a Remarketing shall constitute an irrevocable offer (except as otherwise
described in the Prospectus) by us to purchase or sell Securities subject to
such bid or sell order, or such lesser amount of Securities as we shall be
required to sell or purchase as a result of such Auction or Remarketing, at the
applicable price, all as set forth in the Prospectus, and that if we fail to
place a bid or sell order with respect to Securities owned by us with a
broker-dealer on any Auction or Date, or a broker-dealer to which we communicate
a bid or sell order fails to submit such bid or sell order to the auction agent
or remarketing agent concerned, we shall be deemed to have placed a hold or a
sell order with respect to such Securities as described in the Prospectus. We
authorize any broker-dealer that submits a bid or sell order as our agent in
Auctions or Remarketings to execute contracts for the sale of Securities by such
bid or sell order. We
recognize that the payment of such broker-dealer for Securities purchased on our
behalf shall not relieve us of any liability to such broker-dealer for payment
for such Securities.
4. We understand that in a Remarketing, the dividend or interest rate
or rates on the Securities and the allocation of Securities tendered for sale
between dividend or interest periods of different lengths will be based from
time to time on the determinations of one or more remarketing agent(s), and we
agree to be conclusively bound by such determinations. We further agree to the
payment of different dividend or interest rates to different holders of
Securities depending on the length of the dividend or interest period elected by
such holders. We agree that any notice given by us to a remarketing agent (or a
broker-dealer for transmission to a remarketing agent) of our desire to tender
Securities in a Remarketing shall constitute an irrevocable (except to the
limited extent set forth in the Prospectus) offer by us to sell the securities
specified in such Notice, or such lesser number of Securities as we shall be
required to sell as a result of such Remarketing, in accordance with the terms
set forth in the Prospectus, and we authorize the remarketing agent to sell,
transfer or otherwise dispose of such Securities as set forth in the Prospectus.
5. We agree that, during the applicable period as described in the
Prospectus, dispositions of Securities can be made only in the denominations set
forth in the Prospectus and we will sell, transfer or otherwise dispose of any
Securities held by us from time to time only pursuant to a bid or sell order
placed in an Auction, in a Remarketing, to or through a broker-dealer or, when
permitted in the Prospectus, to a person that has signed and delivered to the
applicable auction agent or a remarketing agent a letter substantially in the
form of this letter (or other applicable purchaser's letter), provided that in
the case of all transfers other than pursuant to Auctions or Remarketings we or
our broker-dealer or our agent member shall advise such auction agent or a
remarketing agent of such transfer. We understand that a restrictive legend will
be placed on certificates representing the Securities and stop-transfer
instructions will be issued to the transfer agent and/or registrar, all as set
forth in the Prospectus.
6. We agree that, during the applicable period as described in the
Prospectus, ownership of Securities shall be represented by one or more global
certificates registered in the name of the applicable securities depository or
its nominee, that we will not be entitled to receive any certificate
representing the Securities and that our ownership of any Securities will be
maintained in book-entry form by the securities depository for the account of
our agent member, which in turn will maintain records of our beneficial
ownership. We authorize and instruct our agent member to disclose to the
applicable auction agent or remarketing agent such information concerning our
beneficial ownership of Securities as such auction agent or remarketing agent
shall request.
7. We acknowledge that partial deliveries of Securities purchased in
Auctions or Remarketings may be made to us and such deliveries shall constitute
good delivery as set forth in the Prospectus.
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8. This letter is not a commitment by us to purchase any Securities.
9. This letter supersedes any prior-dated version of this master
purchaser's letter, and supplements any prior to post-dated purchaser's letter
specific to any particular Securities, and this letter may only be revoked by a
signed writing delivered to the original recipients hereof.
10. The descriptions of Auction or Remarketing procedures set forth
in each applicable Prospectus are incorporated by reference herein and in case
of any conflict between this letter, any purchaser's letter specific to
particular Securities and any such description, such description shall control.
11. Any xerographic or other copy of this letter shall be deemed of
equal effect as a signed original.
12. Our agent member of The Depository Trust company currently is
__________.
13. Our personnel authorized to place orders with broker-dealers for
the purposes set forth in the Prospectus in Auctions or Remarketings currently
is/are __________, telephone number (___) ________.
14. Our taxpayer identification number is __________.
15. In the case of each offer to purchase, purchase, offer to sell or
sale by us of Securities not registered under the Securities Act of 1933, as
amended (the "Act"), we represent and agree as follows:
(a) We understand and expressly acknowledge that the
Securities have not been and will not be registered under the Act
and, accordingly, that the Securities may not be reoffered, resold or
otherwise pledged, hypothecated or transferred unless an applicable
exemption from the registration requirements of the Act is available.
(b) We hereby confirm that any purchase of Securities made
by us will be for our own account, or for the account of one or more
parties for which we are acting as trustee or agent with complete
investment discretion and with authority to bind such parties, and
not with a view to any public resale or distribution thereof. We and
each other party for which we are acting which will acquire
Securities will be "accredited investors" within the meaning of
Regulation D under the Act with respect to the Securities to be
purchased by us or such party, as the case may be, will have
previously invested in similar types of instructions and will be able
and prepared to bear the economic risk of investing in and holding
such Securities.
(c) We acknowledge that prior to purchasing any Securities
we shall have received a Prospectus (or private placement memorandum)
with respect thereto and
3
acknowledge that we will have had access to such financial and other
information, and have been afforded the opportunity to ask such
questions or representatives of the Company and receive answers
thereto, as we deem necessary in connection with our decision to
purchase Securities.
(d) We recognize that the Company and broker-dealers will
rely upon the truth and accuracy of the foregoing investment
representations and agreements, and we agree that each of our
purchases of Securities now or in the future shall be deemed to
constitute our concurrence in all of the foregoing which shall be
binding on us and each party for which we are acting as set forth in
Subparagraph B above.
Dated: ________________________________ __________________________________
(Name of Purchaser)
Mailing Address of Purchaser
_______________________________________ By: ______________________________
Printed Name:
Title:
_______________________________________
_______________________________________
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EXHIBIT B
SETTLEMENT PROCEDURES
Capitalized terms used herein shall have the respective meanings specified in
the Articles Supplementary or herein, as the case may be.
(a) On each Auction Date for any series of ATP, the Auction Agent
shall notify by telephone or telecopy the Broker-Dealers that participated in
the Auction held for such series on such Auction Date and submitted an Order on
behalf of any Existing Holder or Potential Holder of:
(i) the Applicable Rate fixed for the subsequent Dividend
Period and the Dividend Payment Date therefor;
(ii) whether Sufficient Clearing Orders existed for the
determination of the Applicable Rate;
(iii) if such Broker-Dealer submitted a Hold/Sell Order or
a Sell Order for such series on behalf of an Existing Holder, whether such
Hold/Sell Order or Sell Order was accepted or rejected, in whole or in part, and
the number of shares, if any, of such series of ATP then outstanding to be sold
by such Existing Holder;
(iv) if such Broker-Dealer submitted a Buy Order on behalf
of a Potential Holder, whether such Buy Order was accepted or rejected, in whole
or in part, and the number of shares, if any, of such series of ATP to be
purchased by such Potential Holder;
(v) if the aggregate number of shares of such series of ATP
to be sold by all Existing Holders on whose behalf such Broker-Dealer submitted
Hold/Sell Orders or Sell Orders for such series is different than the aggregate
number of shares of such series of ATP to be purchased by all Potential Holders
on whose behalf such Broker-Dealer submitted Buy Orders, the name or names of
one or more other Broker-Dealers (and the name of the Agent Member, if any, of
each such other Broker-Dealer) and the number of shares of such series of ATP to
be (x) purchased from one or more Existing Holders on whose behalf such other
Broker-Dealer submitted Hold/Sell Orders or Sell Orders for such series, or (y)
sold to one or more Potential Holders on whose behalf such other Broker-Dealers
submitted Buy Orders for such series; and
(vi) the scheduled Auction Date of the next succeeding
Auction with respect to such series of ATP.
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(b) On each Auction Date for any series of ATP, each Broker-Dealer
that submitted an Order for such series on behalf of any Existing Holder or
Potential Holder shall:
(i) as soon as practicable, advise each Existing Holder and
Potential Holder on whose behalf such Broker-Dealer submitted a Buy Order,
Hold/Sell Order or Sell Order for such series whether such Buy Order, Hold/Sell
Order or Sell Order was accepted or rejected, in whole or in part;
(ii) instruct each Potential Holder on whose behalf such
Broker-Dealer submitted a Buy Order for such series that was accepted, in whole
or in part, to instruct such Potential Holder'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 shares of such series of ATP to be purchased
pursuant to such Buy Order against receipt of such shares;
(iii) instruct each Existing Holder on whose behalf such
Broker-Dealer submitted a Hold/Sell Order for such series that was accepted, in
whole or in part, as a Sell Order or a Sell Order for such series that was
accepted, in whole or in part, to instruct such Existing Holder's Agent Member
to deliver to such Broker-Dealer (or its Agent Member) through the Securities
Depository the number of shares of such series of ATP to be sold pursuant to
such Order against payment therefor;
(iv) advise each Existing Holder on whose behalf such
Broker-Dealer submitted an Order for such series that will continue to hold
shares of ATP of such series and each Potential Holder on whose behalf such
Broker-Dealer submitted a Buy Order for such series that was accepted, in whole
or in part, of the Applicable Rate for such series for the next succeeding
Dividend Period for such series;
(v) advise each Existing Holder on whose behalf such
Broker-Dealer submitted an Order for such series of the Auction Date of the next
succeeding Auction for such series; and
(vi) advise each Potential Holder on whose behalf such
Broker-Dealer submitted a Buy Order for such series that was accepted, in whole
or in part, of the Auction Date of the next succeeding Auction for such series.
(c) On the basis of the information provided to it pursuant to (a)
above, each Broker-Dealer that submitted a Buy Order, a Hold/Sell Order or a
Sell Order for any series of ATP shall allocate any funds received by it in
respect of such series pursuant to (b)(ii) above, and any shares of such series
of ATP received by it pursuant to (b)(iii) above, among the Potential Holders,
if any, on whose behalf such Broker-Dealer submitted Buy Orders for such series,
the Existing Holders, if any, on whose behalf such Broker-Dealer submitted Buy
Orders, Hold/Sell Orders or Sell Orders for such series, and any Broker-Dealers
identified to it by the Auction Agent pursuant to (a)(v) above.
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(d) On the Business Day after the Auction Date, the Securities
Depository shall execute the transactions described above, debiting and
crediting the accounts of the respective Agent Members as necessary to effect
the purchases and sales of shares of any series of ATP as determined in the
Auction for such series.
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EXHIBIT C
(Submit only one Order on this Order Form)
THE NEW AMERICA HIGH INCOME FUND, INC.
AUCTION TERM PREFERRED STOCK, SERIES ____ ("ATP")
ORDER FORM
To: ___________________ Date of Auction
___________________
___________________
New York, New York
The undersigned Broker-Dealer submits the following Order covering
the number of shares indicated (complete only one blank):
__________ shares now held by Bidder (an Existing Holder), and the
Order is a (check one):
____ Hold Order; or
____ Hold/Sell Order at a rate of ________%; or
____ Sell Order;
-or-
____ shares not now held by Bidder (a Potential Holder), and the
Order is a Buy Order at a rate of _____%.
Notes:
(1) If submitting more than one Order for one Bidder, use additional
Order forms.
(2) If one or more Orders covering in the aggregate more than the
number of outstanding shares of ATP held by an Existing Holder are submitted,
such Orders shall be considered valid in the order of priority set forth in the
Auction Procedures.
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EXHIBIT D
(To be used only for transfers made
other than pursuant to in Auction)
THE NEW AMERICA HIGH INCOME FUND, INC.
AUCTION TERM PREFERRED STOCK,
SERIES ____ ("ATP") TRANSFER FORM
We are (check one):
____ The Existing Holder named below;
____ The Broker-Dealer for such Existing Holding; or
____ The Agent Member for such Existing Holder.
We hereby notify you that such Existing Holder has transferred
_______ shares of the above series of ATP to ______________.
___________________________________
(Name of Existing Holder)
___________________________________
(Name of Broker-Dealer
___________________________________
(Name of Agent Member)
By: _______________________________
Printed Name:
Title:
9
EXHIBIT E
(To be used only for failures to
deliver shares of Auction Term Preferred
Stock sold pursuant to an Auction)
THE NEW AMERICA HIGH INCOME FUND, INC.
AUCTION TERM PREFERRED STOCK, SERIES ____ ("ATP")
NOTICE OF A FAILURE TO DELIVER
Complete either I or II
I. We are a Broker-Dealer for ___________ (the "Purchaser"), which
purchased ____ shares of the above series of ATP in the Auction held on
_________ from the seller of such shares. We hereby notify you that the Seller
failed to deliver such shares of Auction Term Preferred Stock to the Purchaser.
II. We are a Broker-Dealer for ___________ (the "Seller"), which sold
_____ shares of the above series of ATP in the Auction held on________ to the
purchaser of such shares. We hereby notify you that the Purchaser failed to make
payment to the Seller upon delivery of such shares of Auction Term Preferred
Stock.
Name: _________________________________
(Name of Broker-Dealer)
By: _________________________________
Printed Name:
Title:
