Exhibit 2(k)(iv)
XXXXX & STEERS ADVANTAGE INCOME REALTY FUND, INC.
----------------------------
AUCTION AGENCY AGREEMENT
dated as of December __, 2002
Relating
to Auction Rate Cumulative Preferred Shares
Series ___________
of
XXXXX & STEERS ADVANTAGE INCOME REALTY FUND, INC.
----------------------------
THE BANK OF NEW YORK
as Auction Agent
This Auction Agency Agreement (this "Agreement"), dated as of December
__, 2002, is between XXXXX & STEERS ADVANTAGE INCOME REALTY, INC. (the "Fund")
and The Bank of New York, a New York banking corporation.
The Fund proposes to issue ___________ shares of preferred stock, par
value $.001 per share, designated Series __ Preferred Shares, liquidation
preference $25,000 per share (the "Preferred Shares"), pursuant to the Fund's
Articles Supplementary (as defined below).
The Fund desires that The Bank of New York perform certain duties as
agent in connection with each Auction (as defined below) of Preferred Shares (in
such capacity, the "Auction Agent"), and as the transfer agent, registrar,
dividend paying agent and redemption agent with respect to the Preferred Shares
(in such capacity, the "Paying Agent"), upon the terms and conditions of this
Agreement, and the Fund hereby appoints The Bank of New York as said Auction
Agent and Paying Agent in accordance with those terms and conditions
(hereinafter generally referred to as the "Auction Agent," except in Sections 3
and 4 below).
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the Fund and the Auction Agent 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.
1.2 Certain Defined Terms.
As used herein, the following terms shall have the following meanings,
unless the context otherwise requires:
(a) "Agent Member" of any Person shall mean such Person's
agent member of a participant in the Securities Depository that will act on
behalf of a Bidder.
(b) "Articles Supplementary" shall mean the Articles
Supplementary for Preferred Shares of the Fund dated _________, 2002 specifying
the powers, preferences and rights of the Preferred Shares attached hereto as
Exhibit B.
(c) "Auction" shall have the meaning specified in Section 2.1
hereof.
(d) "Auction Procedures" shall mean the Auction Procedures
that are set forth in Part II of the Articles Supplementary.
(e) "Authorized Officer" 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 hereof in a written communication from the Auction Agent
to the Fund.
(f) "Broker-Dealer Agreement" shall mean each agreement
between the Auction Agent and a broker-dealer substantially in the form attached
hereto as Exhibit A.
(g) "Closing" shall mean the date the Fund consummates the
transactions for the issuance and sale of the Preferred Shares.
(h) "Fund Officer" shall mean the Chairman, the President,
each Vice President (whether or not designated by a number or word or words
added before or after the title "Vice President"), the Secretary, the Treasurer,
each Assistant Secretary and each Assistant Treasurer of the Fund and every
other officer or employee of the Fund designated as a "Fund Officer" for
purposes hereof in a written notice from the Fund to the Auction Agent.
(i) "Holder" shall be a holder of record of one or more
Preferred Shares, listed as such in the share register maintained by the Paying
Agent pursuant to Section 4.6 hereof.
(j) "Interest Equivalent" means a yield on a 360-day basis of
a discount basis security which is equal to the yield on an equivalent
interest-bearing security.
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. THE AUCTION.
2.1 Purpose; Incorporation by Reference of Auction Procedures.
(a) The Articles Supplementary provides that the Applicable
Rate on shares of the Preferred Shares, as the case may be, for each Dividend
Period therefor after the initial Dividend Period shall be the rate per annum
that a commercial bank, trust company or other financial institution appointed
by the Fund advises results from the implementation of the Auction Procedures.
The Board of Directors of the Fund has adopted a resolution appointing The Bank
of New York as Auction Agent for purposes of the Auction Procedures. The Auction
Agent hereby accepts such appointment and agrees that, on each Auction Date, it
shall follow the procedures set forth in this Section 2 and the Auction
Procedures for the purpose of determining the Applicable Rate for the Preferred
Shares for the next Dividend Period. Each periodic operation of such procedures
is hereinafter referred to as an "Auction."
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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 hereof to the same extent as if such provisions were set forth fully
herein.
2.2 Preparation for Each Auction; Maintenance of Registry of Existing
Holders.
(a) As of the date hereof, the Fund shall provide the Auction
Agent with a list of the Broker-Dealers previously approved by the Auction Agent
and shall cause to be delivered to the Auction Agent for execution by the
Auction Agent a Broker-Dealer Agreement signed by each such Broker-Dealer. The
Auction Agent shall keep such list current and accurate based upon information
provided to it by Broker-Dealers and shall indicate thereon, or on a separate
list, the identity of each Existing Holder, if any, whose most recent Order was
submitted by a Broker-Dealer on such list and resulted in such Existing Holder
continuing to hold or purchase Preferred Shares. Not later than five Business
Days prior to any Auction Date for which any change in such list of
Broker-Dealers is to be effective, the Fund shall notify the Auction Agent in
writing of such change and, if any such change is the addition of a
Broker-Dealer to such list, the Fund shall cause to be delivered to the Auction
Agent for execution by the Auction Agent a Broker-Dealer Agreement signed by
such Broker-Dealer. The Auction Agent shall have entered into a Broker-Dealer
Agreement with each Broker-Dealer prior to the participation of any such
Broker-Dealer in any Auction.
(b) The provisions contained in Section 4 of Part I of the
Articles Supplementary concerning Special Dividend Periods and the notification
of a Special Dividend Period will be followed by the Fund and, to the extent
applicable, the Auction Agent, and the provisions contained therein are
incorporated herein by reference in their entirety and shall be deemed to be a
part of this Agreement to the same extent as if such provisions were set forth
fully herein.
(c) (i) On each Auction Date, the Auction Agent shall
determine the dividend rate and the Maximum Rate. If any "AA" Composite
Commercial Paper Rate, Treasury Index Rate or Reference Rate, as the case may
be, is not quoted on an interest or bond equivalent, as the case may be, basis,
the Auction Agent shall convert the quoted rate to the interest or bond
equivalent thereof as set forth in the definition of such rate in the Articles
Supplementary if the rate obtained by the Auction Agent is quoted on a discount
basis, or if such rate is quoted on a basis other than an interest or bond
equivalent or discount basis the Auction Agent shall convert the quoted rate to
an interest or bond equivalent rate after consultation with the Fund as to the
method of such conversion.
(ii) If any "AA" Composite Commercial Paper Rate is to be
based on rates supplied by Commercial Paper Dealers and one or more of the
Commercial Paper Dealers shall not provide a quotation for the determination of
such "AA" Composite Commercial Paper Rate, the Auction Agent shall immediately
notify the Fund so that the Fund can determine whether to select a substitute
Commercial Paper Dealer or substitute Commercial Paper Dealers to provide the
quotation or quotations not being supplied by any Commercial Paper Dealer or
Commercial Paper Dealers. The Fund shall promptly advise the Auction Agent of
any such selection.
(iii) If any Treasury Index Rate or Treasury Xxxx Rate is
to be based on rates supplied by U.S. Government Securities Dealers and one or
more of the U.S. Government Securities Dealers shall not provide a quotation for
the determination of such Treasury Rate, the Auction Agent shall immediately
notify the Fund so that the Fund can determine whether to select a substitute
U.S. Government Securities Dealer or substitute U.S. Government Securities
Dealers to provide the quotation or quotations not being supplied by any U.S.
Government Securities Dealer or U.S. Government Securities Dealers. The Fund
shall promptly advise the Auction Agent of any such selection. If there is
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any change in any rating of the Preferred Shares which would affect the manner
in which the Auction Agent computes any of the rates mentioned in this Section
2.2, the Fund shall promptly notify the Auction Agent of such change, and of the
new rating.
(d) (i) The Auction Agent shall maintain a current registry of
the Existing Holders of the Preferred Shares based upon information provided to
it by Broker-Dealers for purposes of each individual Auction. The Fund shall use
commercially reasonable efforts to provide or cause to be provided to the
Auction Agent within ten Business Days following the date of the Closing a list
of the initial Existing Holders of Preferred Shares, and the Broker-Dealer of
each such Existing Holder through which such Existing Holder purchased such
shares. The Auction Agent may conclusively rely upon, as evidence of the
identities of the Existing Holders, such list, the results of each Auction and
notices from any Existing Holder, the Agent Member of any Existing Holder or the
Broker-Dealer of any Existing Holder with respect to such Existing Holder's
transfer of any Preferred Shares to another Person.
(ii) In the event of any partial redemption of Preferred
Shares, upon notice in writing by the Fund to the Auction Agent of such partial
redemption, the Auction Agent promptly shall request the Securities Depository
to notify the Auction Agent in writing of the identities of the Agent Members
(and the respective numbers of shares) from the accounts of which shares have
been called for redemption and the person or department at such Agent Member to
contact regarding such redemption. At least two Business Days prior to the
Auction preceding the date of redemption, the Auction Agent shall request each
Agent Member so identified to disclose to the Auction Agent (upon selection by
such Agent Member of the Existing Holders whose shares are to be redeemed) the
number of Preferred Shares of each such Existing Holder, if any, to be redeemed
by the Fund, provided that the Auction Agent has been furnished with the name
and telephone number of a person or department at such Agent Member from which
it is to request such information. In the absence of receiving any such
information with respect to an Existing Holder, from such Existing Holder's
Agent Member or otherwise, the Auction Agent may continue to treat such Existing
Holder as having ownership of the number of Preferred Shares shown in the
Auction Agent's registry of Existing Holders.
(iii) The Auction Agent shall register a transfer of the
ownership of Preferred Shares from an Existing Holder to another Existing
Holder, or to another Person if permitted by the Fund, only if (A) such transfer
is made pursuant to an Auction or (B) if such transfer is made other than
pursuant to an Auction, the Auction Agent has been notified of such transfer in
writing, in a notice substantially in the form of Exhibit B to the Broker-Dealer
Agreement, by such Existing Holder or by the Agent Member of such Existing
Holder. The Auction Agent is not required to accept any notice of transfer
delivered for an Auction unless it is received by the Auction Agent by 3:00 p.m.
on the Business Day next preceding the Auction Date. The Auction Agent shall
rescind a transfer made on the registry of the Existing Holders of any Preferred
Shares if the Auction Agent has been notified in writing, in a notice
substantially in the form of Exhibit C to the Broker-Dealer Agreement, by the
Agent Member or the Broker-Dealer of any Person that (i) purchased any Preferred
Shares and the seller failed to deliver such shares or (ii) sold any Preferred
Shares and the purchaser failed to make payment to such Person upon delivery to
the purchaser of such shares.
(e) The Auction Agent may, but shall not be obligated to,
request that the Broker Dealers, as set forth in Section 3.2(b) of the
Broker-Dealer Agreements, provide the Auction Agent with a list of their
respective customers that such Broker-Dealers believe are Beneficial Owners of
Preferred Shares. The Auction Agent shall keep confidential any such information
and shall not disclose any such information so provided to any Person other than
the relevant Broker-Dealer and the Fund; 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-
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judicial agency or authority having the authority to compel such disclosure, (b)
it is advised by its counsel that its failure to do so would be unlawful or (c)
failure to do so would expose the Auction Agent to loss, liability, claim,
damage or expense for which it has not received indemnity or security
satisfactory to it.
2.3 Auction Schedule.
The Fund and the Auction Agent shall normally conduct Auctions every
seven days in the case of the Preferred Shares, 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 withheld unreasonably. The
Auction Agent shall give notice of any such change to each Broker-Dealer. Such
notice shall be received prior to the first Auction Date on which any such
change shall be effective.
Time Event
---- -----
By 9:30 am. Auction Agent shall advise the Fund
and the Broker-Dealers of Maximum
Rate as set forth in Section
2.2(c)(i) hereof.
9:30 a.m. - 1:00 p.m. Auction Agent shall assemble
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 shall make
determinations pursuant to Section
4(a) of Part II of the Articles
Supplementary.
By approximately 3:30 p.m. Auction Agent shall advise the Fund
of the results of the Auction as
provided in Section 4(b) of Part II
of the Articles Supplementary.
Submitted Bid Orders and Submitted
Sell Orders will be accepted and
rejected in whole or in part and
Preferred Shares will be 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 2.4 hereof.
2.4 Notice of Auction Results.
On each Auction Date, the Auction Agent shall notify Broker-Dealers of
the results of the Auction held on such date by telephone or other electronic
means acceptable to the parties.
2.5 Broker-Dealers.
(a) Not later than 12:00 noon on each Auction Date, the Fund
shall pay to the Auction Agent in Federal Funds or similar same-day funds an
amount in cash equal to (i) in the case of any Auction Date immediately
preceding a seven-day Dividend Period, the product of (A) 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 (B) 1/4 of 1%, times (C)
$25,000 times (D) the sum of the aggregate number of outstanding Preferred
Shares for which the Auction is conducted and (ii) in the case of any Special
Dividend Period, the amount determined by mutual consent of the Fund and the
Broker-Dealers pursuant to Section 3.5 of the Broker-Dealer Agreements. The
Auction Agent shall apply such moneys as set forth in Section 3.5 of the
Broker-Dealer Agreements and shall thereafter remit to the Fund any remaining
funds paid to the Auction Agent pursuant to this Section 2.5(a).
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(b) The Fund may designate an Affiliate or Xxxxxxx Xxxxx
Barney Inc. to act as a Broker-Dealer.
(c) The Auction Agent shall terminate any Broker-Dealer
Agreement as set forth therein if so directed in writing by the Fund.
(d) Subject to Section 2.5(b) hereof, the Auction Agent from
time to time shall enter into such Broker-Dealer Agreements as the Fund shall
direct in writing.
(e) The Auction Agent shall maintain a list of Broker-Dealers.
2.6 Ownership of Preferred Shares and Submission of Bids by the Fund
and Its Affiliates.
Neither the Fund nor any Affiliate of the Fund may submit any Sell
Order or Bid, directly or indirectly, in any Auction, except that an Affiliate
of the Fund that is a Broker-Dealer may submit a Sell Order or Bid on behalf of
a Beneficial Owner or a Potential Beneficial Owner. The Fund shall notify the
Auction Agent in writing if the Fund or, to the best of the Fund's knowledge,
any Affiliate of the Fund becomes a Beneficial Owner of any Preferred Shares.
Any Preferred Shares redeemed, purchased or otherwise acquired (i) by the Fund
shall not be reissued, except in accordance with the requirements of the
Securities Act of 1933, as amended ("Securities Act") or (ii) by its Affiliates
shall not be transferred (other than to the Fund). The Auction Agent shall have
no duty or liability with respect to enforcement of this Section 2.6.
2.7 Access to and Maintenance of Auction Records.
The Auction Agent shall afford to the Fund, its agents, independent
public accountants and counsel, access at reasonable times during normal
business hours to review and make extracts or copies (at the Fund's sole cost
and expense) of all books, records, documents and other information concerning
the conduct and results of Auctions, provided that any such agent, accountant or
counsel shall furnish the Auction Agent with a letter from the Fund requesting
that the Auction Agent afford such person access at least one Business Day prior
to the date of such access. The Auction Agent shall maintain records relating to
any Auction for a period of at least two years after such Auction (unless
requested in writing by the Fund to maintain such records for such longer period
not in excess of four years, then for such longer period), and such records, in
reasonable detail, shall accurately and fairly reflect the actions taken by the
Auction Agent hereunder. The Fund agrees to keep confidential any information
regarding the customers of any Broker-Dealer received from the Auction Agent in
connection with this Agreement or any Auction, and shall not disclose such
information or permit the disclosure of such information without the prior
written consent of the applicable Broker-Dealer to anyone except such agent,
accountant or counsel engaged to audit or review the results of Auctions as
permitted by this Section 2.7. The Fund reserves the right to disclose any such
information if it is advised by its counsel that its failure to do so would (i)
be unlawful or (ii) expose it to liability, unless the Broker-Dealer shall have
offered indemnification satisfactory to the Fund. Any such agent, accountant or
counsel, before having access to such information, shall agree to keep such
information confidential and not to disclose such information or permit
disclosure of such information without the prior written consent of the
applicable Broker-Dealer, provided that such agent, accountant or counsel may
reserve the right to disclose any such information if it is advised by its
counsel that its failure to do so would (i) be unlawful or (ii) expose it to
liability, unless the Broker-Dealer shall have offered indemnification
satisfactory to such agent, accountant or counsel. The Auction Agent shall have
no responsibility for, and shall have no liability in connection with, the
Fund's performance of its duties under this Section 2.7.
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III. THE AUCTION AGENT AS PAYING AGENT.
3.1 The Paying Agent.
The Board of Directors of the Fund has adopted a resolution appointing
The Bank of New York as Auction Agent and Paying Agent. The Paying Agent hereby
accepts such appointment and agrees to act in accordance with its standard
procedures and the provisions of the Articles Supplementary which are specified
herein with respect to the Preferred Shares and as set forth in this Section 3.
3.2 The Fund's Notices to the Paying Agent.
Whenever any Preferred Shares are to be redeemed, the Fund promptly
shall deliver to the Paying Agent a Notice of Redemption, which will be mailed
by the Paying Agent to each Holder at least five Business Days prior to the date
such Notice of Redemption is required to be mailed pursuant to the Articles
Supplementary. The Paying Agent shall have no responsibility to confirm or
verify the accuracy of any such Notice.
3.3 The Fund to Provide Funds for Dividends and Redemptions.
(a) Not later than 12:00 noon on each Dividend Payment Date,
the Fund shall deposit with the Paying Agent an aggregate amount of Federal
Funds or similar same-day funds equal to the declared dividends to be paid to
Holders on such Dividend Payment Date, and shall give the Paying Agent
irrevocable written instructions to apply such funds to the payment of such
dividends on such Dividend Payment Date.
(b) If the Fund shall give a Notice of Redemption, then by
noon of the date fixed for redemption, the Fund shall deposit in trust with the
Paying Agent an aggregate amount of Federal Funds or similar same-day funds
sufficient to redeem such Preferred Shares called for redemption and shall give
the Paying Agent irrevocable written instructions and authority to pay the
redemption price to the Holders of Preferred Shares called for redemption upon
surrender of the certificate or certificates therefor.
3.4 Disbursing Dividends and Redemption Price.
After receipt of the Federal Funds or similar same-day funds and
instructions from the Fund described in Section 3.3 above, the Paying Agent
shall pay to the Holders (or former Holders) entitled thereto (i) on each
corresponding Dividend Payment Date, dividends on the Preferred Shares, and (ii)
on any date fixed for redemption, the redemption price of any Preferred Shares
called for redemption. The amount of dividends for any Dividend Period to be
paid by the Paying Agent to Holders will be determined by the Fund as set forth
in Section 2 of Part I of the Articles Supplementary. The redemption price to be
paid by the Paying Agent to the Holders of any Preferred Shares called for
redemption will be determined as set forth in Section 3 of Part I of the
Articles Supplementary. The Paying Agent shall have no duty to determine the
redemption price and may rely on the amount thereof set forth in the Notice of
Redemption.
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IV. THE PAYING AGENT AS TRANSFER AGENT AND REGISTRAR.
4.1 Original Issue of Share Certificates.
On the Date of Original Issue for any Preferred Share, one certificate
for each series of Preferred Shares shall be issued by the Fund and registered
in the name of Cede & Co., as nominee of the Securities Depository, and
countersigned by the Paying Agent.
4.2 Registration of Transfer or Exchange of Shares.
Except as provided in this Section 4.2, the Preferred Shares shall be
registered solely in the name of the Securities Depository or its nominee. If
the Securities Depository shall give notice of its intention to resign as such,
and if the Fund shall not have selected a substitute Securities Depository
acceptable to the Paying Agent prior to such resignation, then upon such
resignation of the shares of each Series, at the Fund's request, may be
registered for transfer or exchange, and new certificates thereupon shall be
issued in the name of the designated transferee or transferees, upon surrender
of the old certificate in form deemed by the Paying Agent to be properly
endorsed for transfer with (a) all necessary endorsers' signatures guaranteed in
such manner and form and by such guarantor as the Paying Agent may reasonably
require, (b) such assurances as the Paying Agent shall deem necessary or
appropriate to evidence the genuineness and effectiveness of each necessary
endorsement and (c) satisfactory evidence of compliance with all applicable laws
relating to the collection of taxes in connection with any registration of
transfer or exchange or funds necessary for the payment of such taxes. If the
certificate or certificates for Preferred Shares are not held by the Securities
Depository or its nominee, payments upon transfer of shares in an Auction shall
be made in Federal Funds or similar same-day funds to the Auction Agent against
delivery of certificates therefor.
4.3 Removal of Legend.
Any request for removal of a legend indicating a restriction on
transfer from a certificate evidencing Preferred Shares shall be accompanied by
an opinion of counsel stating that such legend may be removed and such shares
may be transferred free of the restriction described in such legend, said
opinion to be delivered under cover of a letter from a Fund Officer authorizing
the Paying Agent to remove the legend on the basis of said opinion.
4.4 Lost, Stolen or Destroyed Shares Certificates.
The Paying Agent shall issue and register replacement certificates for
certificates represented to have been lost, stolen or destroyed, upon the
fulfillment of such requirements as shall be deemed appropriate by the Fund and
by the Paying Agent, subject at all times to provisions of law, the Articles
Supplementary governing such matters and resolutions adopted by the Fund with
respect to lost, stolen or destroyed securities. The Paying Agent may issue new
certificates in exchange for and upon the cancellation of mutilated
certificates. Any request by the Fund to the Paying Agent to issue a replacement
or new certificate pursuant to this Section 4.4 shall be deemed to be a
representation and warranty by the Fund to the Paying Agent that such issuance
will comply with provisions of applicable law and the Articles Supplementary and
resolutions of the Fund.
4.5 Disposition of Canceled Certificates: Record Retention.
The Paying Agent shall retain stock certificates which have been
canceled in transfer or in exchange and accompanying documentation in accordance
with applicable rules and regulations of the Securities and Exchange Commission
(the "Commission") for at least two calendar years from the date of
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such cancellation. The Paying Agent, upon written request by the Fund, shall
afford to the Fund, its agents and counsel access at reasonable times during
normal business hours to review and make extracts or copies (at the Fund's sole
cost and expense) of such certificates and accompanying documentation. Upon
written request by the Fund at any time within the six month period commencing
immediately after the expiration of this two-year period, the Paying Agent shall
deliver to the Fund the canceled certificates and accompanying documentation.
The Fund, at its expense, shall retain such records for a minimum additional
period of at least four calendar years from the date of delivery of the records
to the Fund and shall make such records available during this period at any
time, or from time to time, for reasonable periodic, special, or other
examinations by representatives of the Commission. The Fund also shall undertake
to furnish to the Commission, upon demand, either at its principal office or at
any regional office, complete, correct and current hard copies of any and all
such records. Thereafter, such records shall not be destroyed by the Fund
without the approval of the Paying Agent, which approval shall not be withheld
unreasonably, but will be safely stored for possible future reference.
4.6 Stock Register.
The Paying Agent shall maintain the stock register, which shall contain
a list of the Holders, the number of shares held by each Holder and the address
of each Holder. The Paying Agent shall record in the stock register any change
of address of a Holder upon written notice by such Holder. In case of any
written request or demand for the inspection of the share register or any other
books of the Fund in the possession of the Paying Agent, the Paying Agent will
notify the Fund and secure instructions as to permitting or refusing such
inspection; provided, however, that the Paying 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 and (c)
failure to do so would expose the Paying Agent to loss, liability, claim, damage
or expense for which it has not received indemnity or security satisfactory to
it.
4.7 Return of Funds.
Any funds deposited with the Paying Agent by the Fund for any reason
(other than for the payment of amounts due to the Paying Agent) under this
Agreement, including for the payment of dividends or the redemption of Preferred
Shares, that remain with the Paying Agent after 12 months shall be repaid to the
Fund upon written request by the Fund.
V. REPRESENTATIONS AND WARRANTIES.
5.1 Representations and Warranties of the Fund.
The Fund represents and warrants to the Auction Agent that:
(i) the Fund is duly organized and is validly existing as a
corporation under the laws of the State of Maryland, and has full power to
execute and deliver this Agreement and to authorize, create and issue the
Preferred Shares;
(ii) the Fund is registered with the Commission under the 1940
Act as a closed-end, non-diversified, management investment company;
(iii) this Agreement has been duly and validly authorized,
executed and delivered by the Fund and constitutes the legal, valid and binding
obligation of the Fund, enforceable
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against the Fund in accordance with its terms, subject to bankruptcy,
insolvency, reorganization and other laws of general applicability relating to
or affecting creditors' rights and to general equitable principles;
(iv) the form of the certificates evidencing the Preferred
Shares comply with all applicable laws of the State of Maryland;
(v) the Preferred Shares have been duly and validly authorized
by the Fund and, upon completion of the initial sale of the Preferred Shares and
receipt of payment therefor, will be validly issued by the Fund, fully paid and
nonassessable;
(vi) at the time of the offering of the Preferred Shares, the
shares offered will be registered under the Securities Act and no further action
by or before any governmental body or authority of the United States or of any
state thereof is required in connection with the execution and delivery of this
Agreement or will be required in connection with the issuance of the Preferred
Shares, except such action as required by applicable state securities laws;
(vii) the execution and delivery of this Agreement and the
issuance and delivery of the Preferred Shares do not and will not conflict with,
violate, or result in a breach of the terms, conditions or provisions of, or
constitute a default under, the Articles of Incorporation, any order or decree
of any court or public authority having jurisdiction over the Fund, or any
mortgage, indenture, contract, agreement or undertaking to which the Fund is a
party or by which it is bound; and
(viii) no taxes are payable upon or in respect of the
execution of this Agreement or will be payable upon or in respect of the
issuance of the Preferred Shares.
5.2 Representations and Warranties of the Auction Agent.
The Auction Agent represents and warrants to the Fund that:
(i) the Auction Agent is duly organized and is validly
existing as a banking corporation in good standing under the laws of the State
of New York and has the corporate power to enter into and perform its
obligations under this Agreement; and
(ii) this Agreement has been duly and validly authorized,
executed and delivered by the Auction Agent and constitutes the legal, valid and
binding obligation of the Auction Agent, enforceable against the Auction Agent
in accordance with its terms, subject to bankruptcy, insolvency, reorganization
and other laws of general applicability relating to or affecting creditors'
rights and to general equitable principles.
VI. THE AUCTION AGENT.
6.1 Duties and Responsibilities.
(a) The Auction Agent is acting solely as agent for the Fund
hereunder and owes no duties, fiduciary or otherwise, to any other Person by
reason of this Agreement.
10
(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 willful misconduct or gross 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.
6.2 Rights of the Auction Agent.
(a) The Auction Agent may conclusively rely upon, and shall be
fully protected in acting or refraining from acting upon, any communication
authorized hereby 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 or refraining from acting upon any telephone communication
authorized hereby which the Auction Agent reasonably believes in good faith to
have been given by the Fund or by a Broker-Dealer. The Auction Agent may record
telephone communications with the Fund or with the Broker-Dealers or with both.
(b) The Auction Agent may consult with counsel of its choice,
and the advice of such counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reasonable 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. The Auction Agent shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Fund.
(d) The Auction Agent may perform its duties and exercise its
rights hereunder either directly or by or through agents or attorneys and, in
the absence of willful misconduct or gross negligence on the part of any such
agent or attorney, shall not be responsible for the conduct on the part of any
such agent or attorney appointed by it with due care.
(e) The Auction Agent shall not be liable for any error of
judgment made in good faith unless the Auction Agent shall have been grossly
negligent in ascertaining the pertinent facts necessary to make such judgment.
In no event shall the Auction Agent be liable for special, indirect or
consequential loss or damages of any kind whatsoever (including, but not limited
to, loss of profits), even if the Auction Agent has been advised of the
likelihood of such loss or damages and regardless of the form of action, except
in the event of willful misconduct or gross negligence on the part of the
Auction Agent.
(f) The Auction Agent shall not be required to and shall make
no representations and have no responsibilities as to the validity, accuracy,
value or genuineness of any signatures or endorsements, other than its own. The
Auction Agent makes no representations as to and shall have no liability with
respect to the correctness of the recitals in, or the validity, accuracy or
adequacy of this Agreement, any Broker-Dealer Agreement, any offering material
used in connection with the offer and sale of the Preferred Shares or any other
agreement or instrument executed in connection with the transactions
contemplated herein or in any thereof. The Auction Agent shall have no
obligation or liability in respect of the registration or exemption therefrom of
the Preferred Shares under federal or state securities laws in respect of the
sufficiency or the conformity of any transfer of the Preferred Shares
11
pursuant to the terms of the Auction Agency Agreement, any Broker Dealer
Agreement, or any other document contemplated thereby or related thereto.
(g) Whenever in the administration of the provisions of this
Agreement the Auction Agent shall deem it necessary or desirable that a matter
be proved or established prior to taking or suffering any action to be taken
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of gross negligence or willful
misconduct on the part of the Auction Agent, be deemed to be conclusively proved
and established by a certificate signed by the Fund or the Broker-Dealer, and
delivered to the Auction Agent and such certificate, in the absence of gross
negligence or willful misconduct on the part of the Auction Agent, shall be full
warrant to the Auction Agent for any action taken or omitted by it under the
provisions of this Agreement upon the faith thereof.
(h) The Auction Agent shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, entitlement
order, approval or other paper or document furnished by Fund or the
Broker-Dealer, except to the extent that such failure to investigate would be
deemed grossly negligent.
(i) Any corporation into which the Auction Agent may be merged
or converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Auction Agent shall be
a party, or any corporation succeeding to the Dealing and Trading business of
the Auction Agent shall be the successor of the Auction Agent hereunder, with
the consent of the Fund but without the execution of filing any paper with any
party hereto or any further act on the part of any of the parties hereto, except
where any instrument of transfer or assignment is required by law to effect such
succession, anything herein to the contrary notwithstanding.
6.3 Compensation, Expenses and Indemnification.
(a) The Fund shall pay to the Auction Agent from time to time
such compensation for all services rendered by it under this Agreement and under
the Broker-Dealer Agreements as shall be set forth in a separate writing signed
by the Fund and the Auction Agent, subject to adjustments if the Preferred
Shares no longer are held of record by the Securities Depository or its nominee
or if there shall be such other change as shall increase or decrease materially
the Auction Agent's obligations hereunder or under the Broker-Dealer Agreements.
(b) The Fund shall reimburse the Auction Agent upon its
request for all reasonable expenses, disbursements and advances incurred or made
by the Auction Agent in accordance with any provision of this Agreement and of
the Broker-Dealer Agreements (including the reasonable compensation, expenses
and disbursements of its agents and counsel), except any expense, disbursement
or advance attributable to its gross negligence or willful misconduct.
(c) The Fund shall indemnify the Auction Agent and its
officers, directors, employees and agents for, and hold it harmless against, any
loss, liability or expense incurred without gross negligence or willful
misconduct on the part of the Auction Agent arising out of or in connection with
its agency under this Agreement and under the Broker-Dealer Agreements,
including the costs and expenses of defending itself against any claim of
liability in connection with its exercise or performance of any of its duties
hereunder and thereunder, except such as may result from its gross negligence or
willful misconduct.
12
6.4 Force Majeure
The Auction Agent shall not be responsible for or liable for any
failure or delay in the performance of its obligations under this Agreement
arising out of or caused, directly or indirectly, by circumstances beyond its
reasonable control, including, without limitation, acts of God; earthquakes;
fires; floods; wars; civil or military disturbances; acts of terrorism;
sabotage; epidemics; riots; interruptions, loss or malfunctions of utilities;
computer (hardware or software) or communications services; accidents; labor
disputes; acts of civil or military authority or governmental actions; it being
understood that the Auction Agent shall use commercially reasonable efforts
which are consistent with accepted practices in the banking industry to resume
performance as soon as practicable under the circumstances.
VII. MISCELLANEOUS.
7.1 Term of Agreement.
(a) The term of this Agreement is unlimited unless it shall be
terminated as provided in this Section 7.1. The Fund may terminate this
Agreement at any time by so notifying the Auction Agent in writing, provided
that, if any Preferred Shares remain outstanding, the Fund shall have entered
into an agreement with a successor auction agent. The Auction Agent may
terminate this Agreement upon prior notice to the Fund on the date specified in
such notice, which date shall be no earlier than 60 days after delivery of such
notice. The Auction Agent may resign after 30 days following the delivery of
notice to the Fund that the Auction Agent has not been paid amounts due to it.
If the Auction Agent terminates this Agreement while any Preferred Shares remain
outstanding, the Fund shall use its best efforts to enter into an agreement with
a successor auction agent containing substantially the same terms and conditions
as this Agreement.
(b) Except as otherwise provided in this Section 7.1(b), the
respective rights and duties of the Fund and the Auction Agent under this
Agreement shall cease upon termination of this Agreement. The Fund's
representations, warranties, covenants and obligations to the Auction Agent
under Sections 5.1 and 6.3 hereof shall survive the termination hereof. Upon
termination of this Agreement, the Auction Agent shall (i) resign as Auction
Agent under the Broker-Dealer Agreements, (ii) at the Fund's written request,
deliver promptly to the Fund copies of all books and records maintained by it in
connection with its duties hereunder, and (iii) at the written request of the
Fund, transfer promptly to the Fund or to any successor auction agent any funds
deposited by the Fund with the Auction Agent (whether in its capacity as Auction
Agent or as Paying Agent) pursuant to this Agreement which have not been
distributed previously by the Auction Agent in accordance with this Agreement.
7.2 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 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:
13
If to the Fund, Xxxxx & Steers Premium Income Realty Fund, Inc.
addressed to: Attn: Xxxxxx X. Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
If to the Auction Agent, The Bank of New York
addressed to: Corporate Trust Administration
000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Dealing and Trading
Group - Auction Desk
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
or such other address or telecopier number as such parry 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 the Fund by a Fund Officer and on
behalf of the Auction Agent by an Authorized Officer.
7.3 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, except for written
agreements relating to the compensation of the Auction Agent.
7.4 Benefits.
Nothing herein, express or implied, shall give to any Person, other
than the Fund, the Auction Agent and their respective successors and assigns,
any benefit of any legal or equitable right, remedy or claim hereunder.
7.5 Amendment; Waiver.
(a) 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. The Fund shall notify the Auction Agent in writing of any change in
the Articles Supplementary prior to the effective date of any such change. If
any such change in the Articles Supplementary materially increases the Auction
Agent's obligations hereunder, the Fund shall obtain the written consent of the
Auction Agent prior to the effective date of such change.
(b) Failure of either party hereto to exercise any right or
remedy hereunder in the event of a breach hereof by the other party shall not
constitute a waiver of any such right or remedy with respect to any subsequent
breach.
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7.6 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 the
Fund and the Auction Agent. This Agreement may not be assigned by either party
hereto absent the prior written consent of the other party, which consent shall
not be withheld unreasonably.
7.7 Severability.
If any clause, provision or section hereof shall be ruled invalid or
unenforceable by any court of competent jurisdiction, the invalidity or
unenforceability of such clause, provision or section shall not affect any of
the remaining clauses, provisions or sections hereof.
7.8 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.
7.9 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.
7.10 Jurisdiction.
The parties agree that all actions and proceedings arising out of this
Auction Agency Agreement or any of the transactions contemplated hereby shall be
brought in the County of New York, and, in connection with any such action or
proceeding, submit to the jurisdiction of, and venue in, such County. Each of
the parties hereto also irrevocably waives all right to trial by jury in any
action, proceeding or counterclaim arising out of this Agreement or the
transactions contemplated hereby.
[Signature pages follow]
15
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.
XXXXX & STEERS ADVANTAGE INCOME
REALTY FUND, INC.
By: ____________________________________
Name: Xxxxxx Xxxxx
Title: President
THE BANK OF NEW YORK, As Auction
Agent
By: ____________________________________
Name: Xxxxxx Xxxxxxxxx
Title: Vice President
16
EXHIBIT A
XXXXX & STEERS ADVANTAGE INCOME REALTY FUND, INC.
THE BANK OF NEW YORK,
as Auction Agent
----------------------------
BROKER-DEALER AGREEMENT
dated as of December __, 2002
Relating to
Auction Rate Cumulative Preferred Shares
Series _______________
of
XXXXX & STEERS ADVANTAGE INCOME REALTY FUND, INC.
----------------------------
[BROKER DEALER]
A-1
EXHIBIT B
(Note: To be used only for transfers made other than pursuant to an Auction)
TRANSFER FORM
Re: XXXXX & STEERS ADVANTAGE INCOME REALTY FUND, INC.
Auction Rate Cumulative Preferred Shares ("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 Series _____ Preferred Shares to
________________________________.
___________________________________
(Name of Existing Holder)
___________________________________
(Name of Broker-Dealer)
___________________________________
(Name of Agent Member)
By:___________________
Printed Name:
Title:
B-1
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 __ Preferred Shares of XXXXX & STEERS
ADVANTAGE INCOME REALTY 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:
C-1
