EXHIBIT k.2
AIM Select Real Estate Income Fund
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Auction Agent
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BROKER-DEALER AGREEMENT
dated as of ________ __, 2002
Relating to
Auction Rate Preferred Shares
Series M, W, R and F
of
AIM Select Real Estate Income Fund
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[BROKER DEALER]
BROKER-DEALER AGREEMENT
This Broker-Dealer Agreement dated as of _______ __, 2002, is between
____________________, a New York banking corporation (the "Auction Agent") (not
in its individual capacity, but solely as agent of AIM Select Real Estate Income
Fund (the "Fund"), pursuant to authority granted to it in the Auction Agency
Agreement dated as of ________ __, 2002, between the Fund and the Auction Agent
(the "Auction Agency Agreement")) and [BROKER DEALER] (together with its
successors and assigns, "BD").
The Fund proposes to issue ______ shares each of Series M, W, R and F
(each, a "Series") Auction Rate Preferred Shares, par value $0.001 per share,
liquidation preference $25,000 per share (the "Preferred Shares"), pursuant to
the Fund's Statement (as defined below).
The Statement provides that for each subsequent Dividend Period of
Preferred Shares then outstanding, the Applicable Rate for Preferred Shares for
each subsequent Dividend Period shall be equal to the rate per annum that
results from an Auction for Outstanding Preferred Shares 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
Board of Trustees of the Fund has adopted a resolution appointing Deutsche Bank
as Auction Agent for purposes of the Auction Procedures, and pursuant to Section
2.5 of the Auction Agency Agreement, the Fund has requested and directed the
Auction Agent to execute and deliver this Agreement.
The Auction Procedures require the participation of one or more
Broker-Dealers.
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 Statement.
Capitalized terms not defined herein shall have the respective meanings
specified in the Statement.
1.2 Terms Defined Herein.
As used herein, the following terms shall have the following meanings,
unless the context otherwise requires:
(a) "Auction" shall have the meaning specified in Section 2.1
of the Auction Agency Agreement.
(b) "Auction Procedures" shall mean the Auction Procedures
that are set forth in Part II of the Statement.
(c) "Authorized Officer" shall mean each Managing Director,
Vice President, Assistant Vice President and Associate 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 communication to BD.
(d) "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.
(e) "Broker-Dealer Agreement" shall mean this Agreement and
any substantially similar agreement between the Auction Agent and a
Broker-Dealer.
(f) "Statement" shall mean the Amended and Restated Statement
Establishing and Fixing the Rights and Preferences of Auction Rate Preferred
Shares for Preferred Shares of the Fund, attached hereto as Exhibit D and
included in Amended and Restated Amendment No. 1 dated __________, 2002 to the
Fund's Amended and Restated Agreement and Declaration of Trust, as amended (the
"Declaration").
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.
(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 Statement
concerning the notification of a Special Rate 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 the applicable Series of Preferred Shares for each
applicable Dividend Period.
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(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 1 of Part III of the
Statement 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 a Series
of Preferred Shares, the Auction Agent shall advise BD by telephone of the
Reference Rate and the Maximum Rate in effect on such Auction Date with respect
to such Series.
(b) The Auction Agent from time to time may request BD to
provide it with a list of the respective customers BD believes are Beneficial
Owners 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 the Fund; and
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. The Auction Agent shall transmit any list of customers BD
believes are Beneficial Owners of Preferred Shares and information related
thereto only to its officers, employees, agents or representatives, or those of
the Fund, 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 Fund and the Auction Agent shall conduct Auctions for
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.
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Time Event
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By 9:30 A.M. Auction Agent shall advise the Fund and the
Broker-Dealers of the Reference Rate and the Maximum
Rate as set forth in Section 3.2(a) hereof.
9:30 A.M. - 1:30 P.M. Auction Agent shall assemble information communicated
to it by Broker-Dealers as provided in Section 2 of
Part II of the Statement. Submission Deadline is 1:30
P.M.
Not earlier than 1:30 P.M. Auction Agent shall make determinations pursuant to
Section 3(a) of Part II of the Statement.
By approximately 3:00 P.M. Auction Agent shall advise the Fund of the results of
the Auction as provided in Section 3(b) of Part II of
the Statement.
Submitted Bids and Submitted Sell Orders will be
accepted and rejected in whole or in part and
Preferred Shares will be allocated as provided in
Section 4 of Part II of the Statement.
Auction Agent shall give notice of the Auction results
as set forth in Section 3.4(a) hereof.
(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
Statement.
(c) BD shall submit Orders to the Auction Agent in writing in
substantially the form attached hereto as Exhibit A. 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 B, of transfers 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 C, of the failure of Preferred Shares to be
transferred to or by any Person that purchased or sold 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.
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3.4 Notice of Auction Results.
(a) On each Auction Date, the Auction Agent shall notify BD by
telephone of the results of the Auction. 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.
(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 Preferred Shares in
an Auction fails to deliver such shares, the Broker-Dealer of any Person that
was to have purchased Preferred Shares in such Auction may deliver to such
Person a number of whole shares 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 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 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 Fund 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 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 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 result of such submission plus (B) the aggregate number of Preferred Shares
subject to valid Hold Orders (determined in accordance with Section 2 of Part II
of the Statement) submitted to the Auction Agent by BD plus (C) the number of
Preferred Shares deemed to be subject to Hold Orders by Beneficial Owners
pursuant to Section 2 of Part II of the Statement 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 Rate Period of
one year or longer, that amount as mutually agreed upon by the Fund and BD, at
the commencement of such Special Rate Period.
For purposes of subclause (a)(iv)(C) of the foregoing sentence, if any
Beneficial Owner who acquired Preferred Shares through BD transfers those shares
to another Person other than pursuant to an Auction, then BD shall continue to
be the Broker-Dealer for the shares so
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transferred; 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. THE AUCTION AGENT.
4.1 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 by reason of this
Agreement.
(b) The Auction Agent undertakes to perform such duties and
only such duties as are set forth specifically 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 by
it, 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 negligent
in ascertaining (or failing to ascertain) the pertinent facts.
4.2 Rights of the Auction Agent.
(a) The Auction Agent may rely upon, and shall be protected in
acting or refraining from acting upon, any communication authorized by this
Agreement and any written instruction, notice, request, direction, consent,
report, certificate, share certificate or other instrument, paper or document
reasonably believed 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 reasonably believes in good faith to have been given by the
Fund or by BD. The Auction Agent may record telephone communications with BD.
(b) The Auction Agent may consult with counsel of its own
choice, and the advice of such counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon.
(c) The Auction Agent shall not be required to advance, expend
or risk its own funds or otherwise incur or become exposed to financial
liability in the performance of its duties hereunder.
(d) The Auction Agent may perform its duties and exercise its
rights hereunder either directly or by or through agents or attorneys.
4.3 Auction Agent's Disclaimer.
The Auction Agent makes no representation as to the validity or
adequacy of this Agreement or the Preferred Shares.
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V. MISCELLANEOUS.
5.1 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 Xxxxxxx Xxxxx Xxxxxx Inc., then neither Xxxxxxx Xxxxx Barney
Inc. 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. Subject to the notice requirement in the preceding
sentence, the Fund in its sole discretion may direct the Auction Agent to
terminate this Agreement with any Broker-Dealer pursuant to the terms hereof,
for any reason or for no reason.
5.2 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 Preferred
Shares available in same-day funds on each Dividend Payment Date to customers
that use BD (or its affiliate) as Agent Member.
5.3 Agent Member.
At the date hereof, BD represents that it is a participant of the
Securities Depository.
5.4 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, Deutsche Bank Trust Company Americas
addressed to: Corporate Trust and Agency Services
000 Xxxxx Xxx
Xxxxxx Xxxx, XX 00000
Attention: Auction Rate Securities
Telecopier No.: 000-000-0000
Telephone No.: 000-000-0000
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If to the BD, [BROKER DEALER]
addressed to: Telecopier No.: (212) ___-____
Telephone No.: (212) ___-____
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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 received at the address specified herein.
Communications shall be given on behalf of BD by a
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BD Officer and on behalf of the Auction Agent by an Authorized Officer. BD may
record telephone communications with the Auction Agent.
5.5 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.
5.6 Benefits.
Nothing in this Agreement, express or implied, shall give to any
person, other than the Fund, the Auction Agent and BD and their respective
successors and assigns, any benefit of any legal or equitable right, remedy or
claim under this Agreement.
5.7 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.
5.8 Successors and Assigns.
(a) 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; provided,
however, that this Agreement may be assigned by the Auction Agent to a successor
Auction Agent selected by the Fund without the consent of BD.
5.9 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.
5.10 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.
5.11 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.
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5.12 Limitation of Liability.
Notice is hereby given that, as provided by applicable law, the
obligations of or arising out of this Agreement are not binding upon any of the
shareholders of the Fund individually but are binding only upon the assets and
property of the Fund and that the shareholders shall be entitled, to the fullest
extent permitted by applicable law, to the same limitation on personal liability
as shareholders of private corporations for profit.
[Signature pages follow]
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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.
DEUTSCHE BANK TRUST COMPANY
AMERICAS
---------------------------------------
By:
Title:
[BROKER DEALER]
---------------------------------------
By:
Title:
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EXHIBIT INDEX
Exhibit A Auction Bid Form
Exhibit B Transfer Form
Exhibit C Notice of Failure to Deliver
Exhibit D Statement of ARPS
EXHIBIT A
DEUTSCHE BANK TRUST COMPANY AMERICAS
AUCTION BID FORM
Submit To: Issue:
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Deutsche Bank Trust Company Americas AIM Select Real Esate Income Fund
Corporate Trust and Agency Group Auction Rate Preferred Shares, Series [M,W,T or F]
Four Albany Street ("Preferred Shares")
Xxx Xxxx, XX 00000
Attention: Auction Rate Securities
Telecopier No.: (000) 000-0000
Telephone 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 now held ___________ HOLD _________________________________
BID at rate of _______________________
SELL _________________________________
POTENTIAL BENEFICIAL OWNER
# of shares ___________
BID at rate of __________ Notes:
(1) If submitting more than one Bid for one Bidder, use additional Auction
Bid Forms.
(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.
NAME OF BROKER-DEALER ________________________________
Authorized Signature _________________________________
EXHIBIT B
(Note: To be used only for transfers made other than pursuant to an Auction)
TRANSFER FORM
Re:
AIM Select Real Estate Income Fund
Auction Rate Preferred Shares, Series [M, W, R or F]
("Preferred Shares")
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 ________ shares of Preferred Shares to ___________________________.
__________________________________________
(Name of Existing Holder)
__________________________________________
(Name of Broker-Dealer)
__________________________________________
(Name of Agent Member)
By:_______________________________
Printed Name:
Title:
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 ________ shares of Series __ of Preferred Shares of
AIM Select Real
Estate Income Fund 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:
EXHIBIT D
STATEMENT OF ARPS
Incorporated by reference to Attachment A of the Statement of Additional
Information contained in Registrant's electronic filing of Pre-Effective
Amendment No. 1 to the Registration Statement on Form N-2 under the Securities
Act of 1933 on July 17, 2002, File Nos. 333-90388 and 811-21048.
