Exhibit K2
AUCTION AGENT AGREEMENT
between
THE NEW AMERICA HIGH INCOME FUND, INC.
and
BANKERS TRUST COMPANY
Dated as of January 4, 1994
Relating to
Auction Term Preferred Stock, Series A and Series B
of
THE NEW AMERICA HIGH INCOME FUND, INC.
TABLE OF CONTENTS
PAGE
SECTION 1 DEFINITIONS AND RULES OF CONSTRUCTION 1
1.1 Terms Defined by Reference to
ATP Provisions 1
1.2 Terms Defined Herein 1
1.3 Rules of Construction 3
SECTION 2 THE AUCTION 3
2.1 Purpose; Incorporation by Reference of
Auction Procedures and Settlement
Procedures 3
2.2 Preparation of Each Auction; Maintenance
of Registry of Beneficial Owners 4
2.3 Information Concerning Rates 6
2.4 Auction Schedule 7
2.5 Designation of Dividend Period 8
2.6 Notice of Auction Results 10
2.7 Broker-Dealers 10
2.8 Ownership of ATP 10
2.9 Access to and Maintenance
of Auction Records 11
2.10 Dividend and Redemption Price Deposit 11
SECTION 3 THE AUCTION AGENT AS DIVIDEND
AND REDEMPTION PRICE DISBURSING AGENT 11
SECTION 4 THE AUCTION AGENT AS TRANSFER
AGENT AND XXXXXXXXX 00
4.1 Issue of Share Certificates 12
4.2 Registration of Transfer of Shares 12
4.3 Removal of Legend on Restricted Shares 12
(i)
PAGE
4.4 Lost Share Certificates 12
4.5 Disposition of Cancelled
Certificates; Record Retention 12
4.6 Share Transfer Books 13
4.7 Return of Funds 13
SECTION 5 REPRESENTATIONS AND WARRANTIES OF THE FUND 13
SECTION 6 THE AUCTION AGENT 14
6.1 Duties and Responsibilities 14
6.2 Rights of the Auction Agent 15
6.3 Auction Agent's Disclaimer 16
6.4 Compensation, Expenses and
Indemnification 16
SECTION 7 MISCELLANEOUS 16
7.1 Term of Agreement 16
7.2 Communications 17
7.3 Entire Agreement 18
7.4 Benefits 18
7.5 Amendment; Waiver 18
7.6 Successors and Assigns 19
7.7 Severability 19
7.8 Execution in Counterparts 19
7.9 Governing Law 19
(ii)
EXHIBITS
EXHIBIT A - Form of Broker-Dealer Agreement
EXHIBIT B - Form of Master Purchaser's Letter
EXHIBIT C - Settlement Procedures
EXHIBIT D - Form of ATP Provisions
EXHIBIT E - Form of Notice of Auction Dates
EXHIBIT F - Form of Notice of Proposed Designation of Alternate Term
Period
EXHIBIT G - Form of Notice of Designation of Alternate Term Period
EXHIBIT H - Form of Notice of Determination Not to Designate
Alternate Term Period
(iii)
AUCTION AGENT AGREEMENT dated as of January 4, 1994 between THE NEW
AMERICA HIGH INCOME FUND, INC., a Maryland corporation (the "Fund"), and BANKERS
TRUST COMPANY, a New York banking corporation (the "Auction Agent").
WHEREAS, the Fund proposes to issue two series of preferred stock, par
value $1.00 per share, liquidation preference $50,000 per share, designated
Auction Term Preferred Stock, Series A ("ATP Series A"), and Auction Term
Preferred Stock, Series B ("ATP Series B") (together the ATP Series A and ATP
Series B, the "ATP") pursuant to the ATP provisions (as hereinafter defined),
and desires that the Auction Agent perform certain duties in connection with the
ATP upon the terms and subject to the conditions of this Agreement, and hereby
appoints the Auction Agent to act in the capacities set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the Fund and the Auction Agent agree as follows:
1. Definitions and Rules of Construction.
1.1 Terms Defined by Reference to ATP Provisions. Capitalized terms not
defined herein shall have the respective meanings specified in the ATP
Provisions.
1.2 Terms Defined Herein. As used herein and in the Settlement
Procedures, the following terms shall have the following meanings, unless
the context otherwise requires:
(a) "Agent Member" of any Person shall mean the member of, or
participant in, the Securities Depository.
(b) "ATP Provisions" shall mean the Articles Supplementary designating
the ATP Series A and the ATP Series B and establishing the rights and
preferences thereof pursuant to the Articles of Incorporation, as amended,
attached hereto as Exhibit D.
(c) "Auction" shall have the meaning specified in Section 2.1
hereof.
(d) "Auction Procedures" shall mean the auction procedures constituting
Part II of the ATP Provisions.
(e) "Authorized Officer" shall mean each Senior Vice President, Vice
President, Assistant Vice President, Assistant Treasurer and Assistant Secretary
of the Auction Agent and every other officer or employee of the Auction
Agent designated as an "Authorized Officer" for purposes hereof in a
communication to the Fund.
(f) "Broker-Dealer" shall mean any broker-dealer, commercial bank or
other entity permitted by law to perform the functions of a Broker-Dealer that
is a member of or a participant in, the Securities Depository or is an affiliate
of such member or participant, has been selected by the Fund and has entered
into a Broker-Dealer Agreement that remains effective.
(g) "Broker-Dealer Agreement" shall mean each agreement between the
Auction Agent as agent for the Fund and a Broker-Dealer substantially in the
form attached hereto as Exhibit A.
(h) "Existing Holder," when used with respect to shares of any series
of ATP, shall mean a Person who has signed a Master Purchaser's Letter and is
listed as the beneficial owner of such shares of ATP in the records of the
Auction Agent.
(i) "Fund Officer" shall mean the Chairman of the Board of Directors of
the Fund, 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 notice to the Auction Agent.
(j) "Master Purchaser's Letter" shall mean a letter addressed to the
Fund, the Auction Agent, a Broker-dealer and an Agent Member, substantially in
the form attached hereto as Exhibit B.
(k) "Person" means and includes an individual, a partnership, a
corporation, a trust, an unincorporated association, a joint venture or other
entity or a government or any agency or political subdivision thereof.
(l) "Potential Holder," when used with respect to shares of any series
of ATP, shall mean any Person, including any Exhibiting Holder of shares of such
series of ATP, (i) who shall have executed a Master Purchaser's Letter and (ii)
who may be interested in acquiring shares of such series of ATP (or, in the case
of an Existing Holder of shares of such series of ATP, additional shares of such
series of ATP).
(m) "Settlement Procedures" shall mean the Settlement Procedures
attached hereto as Exhibit C.
2
(n) "Underwriter" shall mean Bear, Xxxxxxx & Co. Inc. and any
other person named as an underwriter of the ATP in the Underwriting
Agreement or any schedule thereto.
(o) "Underwriting Agreement" shall mean the Underwriting Agreement
dated December 20, 1993 among the Fund, the Underwriter and the Adviser.
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.
2. The Auction.
2.1 Purpose; Incorporation by Reference of Auction Procedures and
Settlement Procedures.
(a) The ATP Provisions provide that the Applicable Rate per annum for
each series of ATP for each Dividend Period after the Initial Dividend Period
with respect to each series of ATP shall, except under certain conditions, be
equal to the rate per annum that a bank or trust company appointed by the Fund
advises has resulted on the Business Day preceding the first day of such
Dividend Period from implementation of the Auction Procedures for such series.
Each periodic implementation of the Auction Procedures is hereinafter referred
to as an "Auction." The Board of Directors has adopted a resolution appointing
Banks Trust Company as Auction Agent for purposes of the Auction Procedures for
each series of the ATP. The Auction Agent accepts such appointment and agrees to
follow the procedures set forth in this Section 2 and the Auction Procedures for
the purpose of determining the Applicable Rate for each series of ATP for each
Dividend Period thereof for which the Applicable Rate is to be determined by an
Auction.
3
(b) All of the provisions contained in the Auction Procedures and the
Settlement Procedures are incorporated herein by reference in their entirety and
shall be deemed to be a part hereof to the same extent as if such provisions
were fully set forth herein.
2.2 Preparation of Each Auction; Maintenance of Registry of
Beneficial Owners.
(a) Not later than seven days prior to the first Auction Date for any
series of ATP, the Fund shall provide the Auction Agent with a list of the
Broker-Dealers and a manually signed copy of each Broker-Dealer Agreement for
execution by the Auction Agent. Not later than seven days prior to any Auction
Date for any series of ATP for which any change in such list of Broker-Dealers
is to be effective, the Fund will notify the Auction Agent in writing of such
change and, if any such change involves the addition of a Broker-Dealer to such
list, shall cause to be delivered to the Auction Agent for execution by the
Auction Agent a Broker-Dealer Agreement signed by such Broker-Dealer; provided,
however, that if the Fund proposes to designate any Alternate Term Period of any
series of ATP pursuant to Section 4 of Part I of the ATP Provisions, not later
than 11:00 A.M., New York City time, on the Business Day next preceding the
Auction next preceding the first day of such Alternate Term Period, upon the
written request of the Auction Agent, the Fund shall provide the Auction Agent
with a list of the Broker-Dealers for such series and a manually signed copy of
each Broker-Dealer Agreement or a new Schedule A to the Broker-Dealer Agreement
(which Schedule A shall replace and supersede any previous Schedule A to such
Broker-Dealer Agreement) with each Broker-Dealer for such series. The Auction
Agent and the Fund 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) In the event that any Auction Date for any series of ATP shall be
changed after the Auction Agent shall have given the notice referred to in
clause (vii) of paragraph (a) of the Settlement Procedures, or after the notice
referred to in Section 2.5(a) hereof, if applicable, the Auction Agent, by such
means as the Auction Agent deems practicable, shall give notice of such change
to the Broker-Dealers for such series 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.
4
(c) (i) The Auction Agent shall maintain a registry of the beneficial
owners of the shares of each series of ATP who shall constitute Existing Holders
of shares of such series of ATP for purposes of Auctions and shall indicate
thereon the identity of the respective Broker-Dealer of each Existing Holder, if
any, on whose behalf such Broker-Dealer submitted the most recent Order in any
Auction which resulted in such Existing Holder continuing to hold or purchasing
shares of such series of ATP. The Auction Agent shall keep such registry current
and accurate. The Fund shall provide or cause to be provided to the Auction
Agent at or prior to the Date of Original Issue of each series of ATP a list of
the initial Existing Holders of the shares of each such series, the number of
shares purchased by each such Existing Holder and the respective Broker-Dealer
of each such Existing Holder or the affiliate thereof through which each such
Existing Holder purchased such shares. At the request of the Fund, the Auction
Agent shall advise the Fund in writing as to whether the number of Existing
Holders is 500 or more or any Exhisting Holder owns 5% or more of the
outstanding shares of any series of ATP. The Auction Agent may rely upon, as
conclusive evidence of the identities of the Existing Holders of shares of any
series of ATP, (A) such list, (B) the results of Auctions and (C) notices from
any Existing Holder, the Agent Member of any Existing Holder or the
Broker-Dealer of any Existing Holder as described in the first sentence of
Section 2.2(c)(iii) hereof.
(ii) In the event of any partial redemption of any series of ATP, the
Auction Agent shall, at least two Business Days prior to the next Auction for
such series, request the Agent Member of each Existing Holder of shares of ATP
of such series to disclose to the Auction Agent (upon selection by such Agent
Member of the Existing Holders whose shares of ATP of such series are to be
redeemed) the number of shares of ATP of such series, if any, of such Existing
Holder which are subject to such redemption, provided the Auction Agent has been
furnished with the name and telephone number of a person or department at such
Agent Member from which it shall request such information. Upon any refusal of
an Agent Member to release such information, the Auction Agent shall deliver to
such Agent Member a facsimile copy of the Existing Holder's Master Purchaser's
Letter, which authorizes and instructs such Agent Member to release such
information to the Auction Agent. In the absence of receiving any such
information with respect to an
5
Existing Holder, from such Existing Holder's Agent Member or otherwise, the
Auction Agent may continue to treat such Existing Holder as the beneficial owner
of the number of shares of ATP of such series shown in the Auction Agent's
registry.
(iii) The Auction Agent shall be required to register a transfer of
shares of ATP of any series from an Existing Holder of such shares of ATP to
another Person only if such transfer is made to a Person that has delivered, or
on whose behalf has been delivered, a signed Master Purchaser's Letter to the
Auction Agent and if (A) such transfer is pursuant to an Auction or (B) the
Auction Agent has been notified in writing (I) in a notice substantially in the
form of Exhibit D to the Broker-Dealer Agreement by such Existing Holder, the
Agent Member of such Existing Holder or the Broker-Dealer of such Existing
Holder of such transfer or (II) in a notice substantially in the form of Exhibit
E to the Broker-Dealer Agreement by the Broker-Dealer of any Person that
purchased or sold such ATP in an Auction of the failure of such shares of ATP to
be transferred as a result of such Auction. 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.
(iv) The Auction Agent is not required to accept the Master Purchaser's
Letter of any Potential Holder who wishes to submit a Buy 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.
(b) The Auction Agent may request the Broker-Dealers, as set forth in
the Broker-Dealer Agreement, to provide the Auction Agent with a list of their
respective customers that such Broker-Dealers believe are Existing Holders of
shares of any series of ATP. The Auction Agent shall keep confidential such
registry of Existing Holders and shall not disclose the identities of the
Existing Holders of such shares of ATP to any Person other than the Fund and the
Broker-Dealer that provided such information.
2.3 Information Concerning Rates.
(a) On each Auction Date, the Auction Agent shall determine the AA
Composite Commercial Paper Rate or the Treasury Index Rate, as the case may be,
and the Maximum
6
Applicable Rate. If the AA Composite Commercial Paper Rate or the Treasury Index
Rate, as the case may be, is not quoted on an interest basis, if the rate
obtained by the Auction Agent is quoted on a discount basis, or if the rate
obtained by the Auction Agent is quoted on another basis the Auction Agent shall
convert the quoted rate to an interest rate after consultation with the Fund as
to the method of such conversion. Not later than 9:30 A.M. on each Auction Date
the Auction Agent shall notify the Fund and the Broker-Dealers of the Maximum
Applicable Rate so determined and the AA Composite Commercial Paper Rate or the
Treasury Index Rate, as the case may be, used to make such determination.
(b) 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 subject 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.
(c) If any Treasury Index Rate is to be based on rates supplied by U.S.
Government Securities Dealers and one or more of the U.S. Government Securities
Dealers shall not provide a quotation for the determination of such Treasury
Rate, the Auction Agent shall 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 Dealers. The
Fund shall promptly advise the Auction Agent of any such selection.
2.4 Auction Schedule. The Auction Agent shall conduct Auctions for each
series of 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 next preceding the
first Auction Date on which any such change shall be effective.
7
Time Event
By 9:30 A.M. Auction Agent advises the Fund and
Broker-Dealers of the Maximum
Applicable Rate and the Reference
Rate(s), used in determining such
Maximum Applicable Rate as set
forth in Section 2.3(a) hereof,
with respect to each 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
1:00 P.M.
Not earlier than Auction Agent makes determination
1:00 P.M. pursuant to Section 5(a) of the
Auction Procedures.
By approximately Auction Agent advises 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
Paragraph (a) of the Settlement Procedures.
2.5 Designation of Dividend Period.
(a) The ATP Provisions provide that, subject to the Fund's option to
designate an Alternate Term Period as referred to in paragraph (b) of this
Section 2.5, (i) the Dividend Period (other than the initial Dividend Period)
for each series of ATP will be a Standard Term Period. Any such designation of
an Alternate Term Period shall be effective only if (i) notice thereof shall
have been given as provided herein, (ii) any failure to pay in a timely manner
to the Auction Agent the full amount of any dividend on, or the redemption price
of, the ATP shall have been cured, (iii) Sufficient Clearing Orders shall have
existed in an Auction held on the Auction Date immediately preceding the first
day of such proposed Dividend Period other than a Standard Term Period, (iv) if
the Fund shall have mailed a Notice of Redemption with respect to any
8
shares, the Redemption Price with respect to such shares shall have been
deposited with the Auction Agent, and (v) in the case of an Alternate Term
Period, the Fund has provided notice and an ATP Basic Maintenance Report to
Fitch (if Fitch is then rating the ATP) and Xxxxx'x (if Xxxxx'x i then rating
the ATP).
(b) Pursuant to the ATP provisions, the Fund may, at its option,
designate an Alternate Term Period for any series of ATP in the manner described
below and in Section 4 of Part I of the ATP Provisions. If the Fund proposes to
designate any succeeding Alternate Term Period the Fund shall deliver to the
Auction Agent:
(i) A notice of such proposed Alternate Term Period in the form of
Exhibit F hereto not less than 15 nor more than 30 days prior to the first
day of such proposed Alternate Term Period. The Auction Agent on behalf of
the Fund shall deliver such notice by first-class mail, postage prepaid, to
each Existing Holder of shares of such series of ATP at the address
specified in such Existing Holder's Master Purchaser's Letter and to the
Broker-Dealers for such series as promptly as practicable after its receipt
of such notice from the Fund.
(ii) A notice in the form of Exhibit G hereto not later than 3:00 P.M.
on the second Business Day next preceding the first day of such proposed
Alternate Term Period, of either (x) its determination, subject to certain
conditions, to proceed with such Alternate Term Period, in which case the
Fund shall specify the terms of the Specific Redemption Provisions, if any,
or (y) its determination not to proceed with such Alternate Period in which
latter event the succeeding Dividend Period shall be a Standard Term
Period. The Auction Agent shall promptly deliver such notice to the
Broker-Dealers, but in no event later than 3:00 P.M. on the date of such
notice.
(iii) If the Fund fails to deliver either such notice with respect to
any designation of any proposed Alternate Term Period to the Auction Agent
by 3:00 P.M., New York City time, on the second Business Day next preceding
the first day of such proposed Alternate Term Period, the Fund shall be
deemed to have delivered a notice to the auction Agent with respect to such
Dividend Period to the effect that it has determined not to proceed with
the designation of an Alternate Term Period, thereby resulting in a
Standard Term Period.
9
2.6 Notice of Auction Results. On each Auction Date for any series of
ATP, the Auction Agent shall notify Broker-Dealers of the results of the Auction
held on such date by telephone as set forth in paragraph (a) of the Settlement
Procedures.
2.7 Broker-Dealers.
(a) Not later than 12:00 Noon on each Auction Date for any series of
ATP, the Fund shall pay to the Auction Agent an amount in cash equal to the
aggregate fees payable to the Broker-Dealers for such series pursuant to
Section 2.8 of the Broker-Dealer Agreement for such series. The Auction
Agent shall apply such moneys as set forth in Section 2.8 of each such
Broker-Dealer Agreement.
(b) The Fund shall obtain the consent of the Auction Agent prior to
selecting any Person to act as a Broker-Dealer, which consent shall not be
unreasonably withheld.
(c) The Auction Agent shall terminate any Broker-Dealer Agreement as
set forth therein if so directed by the Fund.
(d) Subject to the Auction Agent's having consented to the selection
of the relevant Broker-Dealer pursuant to Section 2.8(b) hereof, the
Auction Agent shall from time to time enter into such Broker-Dealer
Agreements with one or more Broker-Dealers as the Fund shall request, and
shall enter into such schedules to any such Broker-Dealer Agreements as the
Fund shall request, which schedules, among other things, shall set forth
the series of ATP to which such Broker-Dealer Agreement relates.
2.8 Ownership of ATP. The Fund shall notify the Auction Agent if the
Fund or any affiliate of the Fund acquires any shares of ATP of any series.
Neither the Fund nor any affiliate of the Fund shall submit any Order in any
Auction for ATP, except as set forth in the next sentence. Any Broker-Dealer
that is an affiliate of the Fund may submit Orders in Auctions, but only if such
Orders are not for its own account. For purposes of this Section 2.8, a
Broker-Dealer shall not be deemed to be an affiliate of the Fund solely because
one or more of the directors or executive officers of such Broker-Dealer or of
any Person controlled by, in control of or under common control with such
Broker-Dealer is alsoa Director of the fund. The Auction Agent shall have no
duty or liability with respect to enforcement of this Section 2.8.
10
2.9 Access to and Maintenance of Auction Records. The Auction Agent
shall, upon the receipt of prior written notice from the Fund, afford to the
Fund access at reasonable times during normal business hours to all books,
records, documents and other information concerning the conduct and results of
Auctions. The Auction Agent shall maintain records relating to an Auction for a
period of six years after such Auction and such records shall, in reasonable
detail, accurately and fairly reflect the actions taken by the Auction Agent
hereunder.
2.10 Dividend and Redemption Price Deposit. The Fund shall pay to the
Auction Agent, not later than 12:00 noon, New York City time, (A) on the
Business Day next preceding any Dividend Payment Date for any series of ATP, in
funds available on such Dividend Payment Date in The City of New York, New York,
the full amount of any dividends to be paid on such Dividend Payment Date on any
share of such series, and (B) on the Business Day next preceding any redemption
date for any series of ATP in funds available on such redemption date for such
series in The City of New York, New York, the Redemption Price to be paid on
such redemption date for the shares of any such series after notice of
redemption is given as set forth in the ATP Provisions.
3. The Auction Agent as Dividend and Redemption Price Disbursing Agent. The
Auction Agent, as dividend and redemption price disbursing agent, shall pay to
the Holders of shares of ATP of any series (i) on each Dividend Payment Date for
such series, dividends on the shares of ATP of such series, (ii) on any date
fixed for redemption of shares of ATP of any series, the Redemption Price of any
shares of such series called for redemption and (iii) any late charge related to
any payment of dividends or Redemption Price, in each case after receipt of the
necessary funds from the Fund with which to pay such dividends, Redemption Price
or late charge. The amount of dividends for any Dividend Period for any series
of ATP to be paid by the Auction Agent to the Holders of such shares of such
series will be determined by the Fund as set forth in Section 2 of Part I of the
ATP Provisions with respect to such series. The Redemption Price of any shares
to be paid by the Auction Agent to the Holders will be determined by the Fund as
set forth in Section 3 of Part I of the ATP Provisions with respect to such
series. The Fund shall notify the Auction Agent in writing of a decision
toredeem shares of any series of ATP at least five days prior to the date a
notice of redemption is required to be mailed to the Holders of the shares to
be redeemed by paragraph (b) of Section 3 of Part I of the ATP Provisions. Such
notice by the Fund to the Auction Agent shall contain the information required
by paragraph (b) of Section 3 of Part I of the ATP Provisions to be stated in
the notice of redemption required to be mailed by the Auction Agent to such
Holders.
11
4. The Auction Agent as Transfer Agent and Registrar.
4.1 Issue of Share Certificates. Upon the Date of Original Issue of
each series of ATP, one certificate representing all of the shares of each
series issued on such date shall be issued by the Fund and, at the request of
the Fund, registered in the name of Cede & Co. and countersigned by the Auction
Agent.
4.2 Registration of Transfer of Shares. Shares of each series of ATP
shall be registered solely in the name of the Securities Depository or its
nominee.
4.3 Removal of Legend on Restricted Shares. All requests for removal of
legends on shares of any series of ATP indicating restrictions on transfer shall
be accompanied by an opinion of counsel stating that such legends may be removed
and such shares freely transferred, such opinion to be delivered under cover of
a letter from a Fund Officer authorizing the Auction Agent to remove the legend
on the basis of said opinion.
4.4 Lost Share Certificates. The Auction Agent shall issue and register
replacement certificates for certificates represented to have been lost, stolen
or destroyed upon the fulfillment of such requirements as shall be deemed
appropriate by the Fund and the Auction Agent, subject at all times to
provisions of law, the By-Laws of the Fund governing such matters and
resolutions adopted by the Fund with respect to lost securities. The Auction
Agent may issue new certificates in exchange for and upon the cancellation of
mutilated certificates. Any request by the Fund to the Auction 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 Auction Agent that such
issuance will comply with such provisions of law and the By-Laws and resolutions
of the Fund.
4.5 Disposition of Cancelled Certificates; Record Retention. The
Auction Agent shall retain all share certificates which have been cancelled in
transfer or exchange and all accompanying documentation in accordance with
applicable rules and regulations of the Securities and Exchange Commission for
two calendar years. Upon the expiration of this two-year period, the Auction
Agent shall deliver to the Fund the cancelled certificates and accompanying
documentation. The Fund also shall undertake to furnish to the Securities and
Exchange Commission and to the Board of Governors of the Federal Reserve System,
upon demand, at either the principal office or at any regional office, complete,
correct and current hard copies of any and all such records. Thereafter such
records shall not be destroyed by the Fund without the concurrence of the
Auction Agent.
12
4.6 Share Transfer Books. For so long as the Auction Agent, Banks Trust Company,
is acting as the transfer agent for any series of ATP pursuant to this
Agreement, it shall maintain a share transfer book containing a list of the
Holders of the shares of each series of ATP, the number of shares of each series
held by such Holders and the address of each Holder. The Auction Agent shall
record in such share transfer books any change of address of a Holder upon
notice by such Holder. In case of any request or demand for the inspection of
the share transfer books of the Fund or any other books in the possession of the
Auction Agent, the Auction Agent will notify the Fund and secure instructions as
to permitting or refusing such inspection. The Auction Agent reserves the right,
however, to exhibit the share transfer books or other books to any Person in
case it is advised by its counsel that its failure to do so would be unlawful.
4.7 Return of Funds. Any funds deposited with the Auction Agent
hereunder by the Fund for any reason, including but not limited to redemption of
shares of ATP of any series, the remain unpaid after 90 days shall be repaid to
the Fund upon the written request of the Fund, together with interest, if any,
earned thereon.
5. Representations and Warranties of the Fund. The Fund represents and
warrants to the Auction Agent that:
(a) the Fund has been duly organized and is validly existing as a
corporation under the laws of the State of Maryland and has all necessary
corporate power and authority to execute and deliver this Agreement and to
authorize, create and issue the shares of each series of ATP;
(b) this Agreement has been duly and validly authorized, executed and
delivered by the Fund and, assuming due authorization, execution and
delivery by the Auction Agent, constitutes the legal, valid and binding
obligation of the Fund subject, as to enforceability, to bankruptcy,
insolvency, reorganization, moratorium, receivership or similar laws,
whether statutory or decisional, relating to or affecting creditors' rights
and to general equitable principles (regardless of whether enforcement is
sought in equity or at law);
(c) the form of the certificate evidencing the shares of ATP complies
with all applicable laws of the State of Maryland;
13
(d) the shares of AtP, when issued, delivered and paid for on the Date
of Original Issue as contemplated by the Underwriting Agreement, will have
been duly authorized, validly issued, fully paid and nonassessable, except
as provided under Maryland law;
(e) assuming the Underwriter complies with its obligations under the
Underwriting Agreement and that the purchasers of the ATP comply with their
obligations in the Master Purchaser's Letters, no consent, authorization or
order of, or filing or registration with, any court, governmental agency or
official (except such as have been obtained and such as may be required
under the Securities Act of 1933, as amended, or the Investment Company Act
of 1940, as amended, or under the blue sky or state securities laws) is
required in connection with the execution and delivery of this Agreement of
the issuance of the shares of the ATP; and
(f) the issuance and sale of the ATP, the execution, delivery and
performance of this Agreement, the compliance by the Fund with all
provisions hereof, and the consummation of the transactions contemplated
hereby or by the Underwriting Agreement or the Broker-Dealer Agreements,
will not conflict with, constitute a breach of any of the terms or
provisions of, or a default under, or result in the creation or imposition
of any material lien, charge or encumbrance upon any of the assets of the
Fund pursuant to the terms of any agreement, indenture or instrument to
which the Fund is a party or by which the Fund is bound, or result in a
violation of the Articles of Incorporation, ATP Provisions or By-Laws of
the Fund or of any order, rule or regulation of any court or governmental
agency having jurisdiction over the Fund or its property which conflict,
breach, default, lien or violation, individually or in the aggregate, would
have a material adverse effect on the business, financial position or
results of operations of the Fund.
6. The Auction Agent.
6.1 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 specifically set forth in this Agreement and the
Broker-Dealer Agreements, and no implied covenants or obligations shall be
read into this Agreement against the Auction Agent.
14
(c) In the absence of bad faith or gross negligence on its part, the
Auction Agent shall not be liable for any action taken, suffered, or
omitted or for any effort of judgment made by it in the performance of its
duties under this Agreement except that the Auction Agent shall be liable
for any effort of judgment made in good faith if the Auction Agent shall
have been grossly negligent in ascertaining the pertinent facts.
(d) Any funds deposited with the Auction Agent hereunder by the Fund
for any reason, including the payment of dividends or the redemption of
shares of ATP of any series, that remain with the Auction Agent after 90
days shall be repaid to the Fund as provided in Section 4.7 hereof.
6.2 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 by it to be genuine. The Auction Agent shall not be liable for
acting upon any telephone communication authorized hereby which the Auction
Agent believes in good faith to have been given by the Fund or by any
Broker-Dealer. The Auction Agent may record telephone communications with
the Fund or with Any Broker-Dealer.
(b) The Auction Agent may consult with counsel reasonably acceptable
to the Fund 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 and shall
not be responsible for any misconduct on the part of any agent or attorney
appointed by it with due care hereunder except as set forth above in
Section 6.1(c).
15
6.3 Auction Agent's Disclaimer. The Auction Agent makes no
representation as to the validity or adequacy of this Agreement (except as to
the valdity or adequacy of this Agreement (except as to the Auction Agent's
duties hereunder and as to the due authorization, execution and delivery of this
Agreement), the Broker-Dealer Agreements (except as to the Auction Agent's
duties thereunder) or the shares of any series of ATP.
6.4 Compensation, Expenses and Indemnification.
(a) The Fund shall pay the Auction Agent from time to time reasonable
compensation for all services rendered by it under this Agreement and the
Broker-Dealer Agreements in such amounts as may be agreed to by the Fund
and the Auction Agent from time to time.
(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 the
Broker-Dealer Agreements (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any expense
or disbursement attributable to its gross negligence or bad faith.
(c) The Fund shall indemnify the Auction Agent for and hold it
harmless against, any loss, liability or expense incurred without gross
negligence or bad faith on its part, arising out of or in connection with
its agency under this Agreement and the Broker-Dealer Agreements, including
the costs and expenses of defending itself against any claim or liability
in connection with its exercise or performance of its duties hereunder and
thereunder for which indemnification is provided by this subsection.
7. 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 any time by so notifying the Auction Agent in writing, provided
that the Fund has entered into an agreement in substantially the form of
this Agreement with a successor auction agent. The Auction Agent may
terminate this Agreement upon written notice to the Fund, such termination
to be effective on the earlier of (i) the date specified in such notice
which shall not be earlier than 90 days after the giving of such notice or
(ii) the date on which a successor trust company is
16
appointed by the Fund pursuant to an agreement containing
substantially the same terms and conditions as this Agreement.
(b) Except as otherwise provided in this paragraph (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 obligations
under Section 6.4 hereof and its representations and warranties contained
in Section 5 hereof and the Auction Agent's obligations and liabilities
under Sections 2.9 and 4.5 hereof shall survive the termination hereof.
Upon termination of this Agreement, the Auction Agent shall, at the Fund's
request, promptly deliver to the Fund copies of all books and records
maintained by it in connection with its duties hereunder.
7.2 Communications. Except for (a) communications authorized to be by
telephone pursuant to this Agreement or the Auction Procedures and (b)
communications in connection with Auctions (other than those expressly required
to be in writing) and unless otherwise specified by the terms of this Agreement
all notices, requests and other communications to any party hereunder shall be
in writing (including telecopy or similar writing) given to such person at its
address or telecopy number set forth below:
If to the Company, The New America High Income
addressed: Fund, Inc.
00 Xxxxxxxx Xxxxxx, Xxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
With a copy sent to:
Xxxx X. XxXxxxxx, P.C.
Xxxxxxx, Procter & Xxxx
Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
17
If to the Auction Bankers Trust Company
Agent, addressed: Four Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Auction Rate
Securities
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
or to such other address as the party to whom the communication is addressed
shall have previously communicated to the other party. Communications shall be
given on behalf of the Fund by a Fund Officer nad on behalf of the Auction Agent
by an Authorized Officer. Communications shall be effective when received at the
proper address.
7.3 Entire Agreement. This Agreement contains the entire agreement
among the parties relating to the subject matter heroef, and there are no other
representations, endorsements, promises, agreements or understandings, oral,
written or inferred, between the parties. This Agreement supersedes and
terminates all prior agreements between the parties including without limitation
the Auction Agent Agreement dated as of June 15, 1990 (the "TARPS Auction Agent
Agreement"); provided, however, that the Fund shall provide and the Auction
Agent shall disburse funds to redeem the Fund's Taxable Auction Rate Preferred
Stock pursuant to Sections 3.2 and 3.3 of the TARPS Auction Agent Agreement.
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, cancelled or waived, in whole or in part, except by a
written instrument signed by a duly authorized representative of the party
to be charged. The Fund shall notify the Auction Agent and each
Broker-Dealer of any change in the Fund's Articles, prior to the effective
date of any 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 rights or remedies with respect to any
subsequent breach.
18
7.6 Successors and Assigns. This Agreement shall be binding upon,
inure to the benefit of, and be enforceable by, the respective successors of
each of the Fund and the Auction Agent.
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.
IN WITNESS WHEREOF, the parties hereto have caused this Auction Agent
Agreement to be duly executed and delivered by their proper authorized officers
as of the date first above written.
THE NEW AMERICA HIGH INCOME
FUND, INC.
By /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
BANKERS TRUST COMPANY
By /s/ Xxxxxxxx Xxxxx
Name: Xxxxxxxx Xxxxx
Title: Assistant Vice President
DP-4207/d
19
